Expert Agent Interview: Prime Places Dubai - Helen Tatham

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  Prime Places Dubai
   
http://primeplaces.com/
Helen.Tatham@primeplaces.com
(UAE) +971 50 558 8941

Helen Tatham

Helen Tatham

Interview

  1. In which country do you sell property and to what level has the real estate market in your country been affected by the global crisis?

Prime Places Real Estate is based in Dubai and our primary focus is on sales and leasing in Dubai although we can also service requirements in the other six Emirates. When the global crisis hit in 2008, Freehold real estate ownership in the United Arab Emirates was merely six years old.

Prices had escalated at an unbelievable rate since launch founded on speculation and greed unfortunately. Early 2009 saw prices plummet, sales transactions come to a standstill and projects being abandoned by developers with no funding. Bottoming out at around 50% of peak prices the market was very quiet until mid 2011 when we saw more sales activity and prices start to recover. In that time the Government set out to properly regulate the market, provide for investor protection laws and take more precautions to prevent a similar bubble.

Dubai is not immune to global economic crisis but it is way more resilient than it was. It is still considered one of the most important safe havens regionally with a very bright future but if certain nationalities are restricted due to currency deflations then, being the cosmopolitan city that it is, we will feel the effect albeit in a more moderate way.

  1. Have property prices risen or fallen in the last 12 months, or have they bottomed out?

Property prices peaked in mid 2014 having seen them climb up to 40% since mid 2011.

The influence of issues in Europe and Russia in particular, and the strengthening of the Dollar saw owners exit the UAE market and consequently prices have dropped by around 15% again. We believe that we are very near to the bottom of the market and by late 2016, early 2017, we will see prices strengthen once again.

  1. What advice would you give property owners in your area now who are thinking of selling up?

If property owners are thinking of selling within the next 12 months then now is probably a good time to do it rather than wait for the next uplift. If they are wondering whether to sell now and are under no particular pressure then I would advise them to wait for another 18 months.

Currency rates are very much a determining factor, particularly for European investors. One can sell a property in Dubai now for 15% lower than its value 12 months ago and still be better off in Euros.

  1. Does property in your country represent good value for the investor and if so, why?

Yes it does. Dubai is an Emerging Market and yields are attractive for investors but it depends on the area in which one buys. The maturing districts such as Downtown, Palm Jumeirah, Emirates Living, Arabian Ranches, are seeing slightly lower yields of around 4-6% because prices have held better. When comparing capital values of Downtown, which is the central business district, to other major cities, value for money is very good and this area will appreciate as the supply of new units is taken up.

There is still very much an upside in value where yields are currently lower. The highest returns of 8-10% can be sought in areas such as Business Bay, Sports City, Jumeirah Village which are still largely under construction thereby limiting capital values until they mature.

  1. How long before the property market in your country returns to pre-crisis levels and what can we do to avoid the same situation again?

There is a lot of speculation around Expo 2020 which is expected to see 25 million visitors come to Dubai over a six month period. Many businesses are already setting up in the Emirates in anticipation of increased trade.

Property investors with a medium to long term view are already buying properties close to the Expo site in Dubai World Central which will also become the main international airport servicing the UAE, bordering also onto Abu Dhabi, the Capital.

There is every likelihood that prices could reach these peaks again but the improved infrastructure, both materially and legally will go a long way to prevent another free-fall like the last time.

  1. From which country do you find the majority of your property buyers are coming from? Has this changed significantly over the last 5 years?

The majority of buyers have always been and still are Indians, Pakistanis and GCC. Followed by Europeans, Canada, Africa and others.

It has not really changed though the percentage of Europeans and Saudi buyers has increased.

  1. What attracted you to selling property in the region?

I moved to Dubai in 2003 and there was an amazing energy brewing. The Palm Jumeirah had been built and the buildings were underway. New communities were coming up from the sand. The master plan and vision of HH Sheikh Mohammed bin Rashid Al Maktoum was exciting and almost incomprehensible but I couldn't resist getting involved.

I set up my first real estate company with another partner and the rest is history!

  1. What would you estimate the percentage split is between local buyers and international buyers?

The total population of the UAE is 9 million of which around 80% are non-Nationals. So there is no surprise that buyers are predominantly foreigners, in fact if you consider GCC as local, they will equate to no more than 30% of buyers in the UAE.

  1. Do you believe the local Government in your market country is actively encouraging or discouraging foreigners into buying property? How and why?

The Dubai Government had to impose cooling measures in 2013 which included the increase of Transfer Fees, (Stamp Duty) from 2% to 4%, plus the Central Bank capped borrowing at 75% for non-Nationals and 85% for Nationals. Hence we saw a slow down in transactions in early 2014 which ultimately were protective measures to slow down an unsustainable rate of increase in pricing.

That given, the Government is encouraging foreign investment with the offer of Residency with the purchase of property valued at over AED 1m unencumbered. This two year visa allows investors to stay in the UAE whilst valid without having to leave but they cannot work. Also the buying process is very straightforward for any nationality and Emiratis are welcoming in every respect.

  1. What's the biggest benefit for investors of buying in your country over anywhere else?

The UAE is a tax-free environment, no capital gains tax and no income tax on rental proceeds. Low service charges, particularly for villas, allow for high rental yields and lease agreements are largely based on one, two or four cheque payments for the year which gives a cash flow benefit.

The lifestyle experience is also another huge factor and career opportunities attract a high caliber of resident. The purchasing and disposal of property is easy and fast with no property searches or general hindrances.

This is an emerging market with a bright future and many overseas investors end up living here themselves!

Agent Profile

  Prime Places Dubai
   
http://primeplaces.com/
Helen.Tatham@primeplaces.com
(UAE) +971 50 558 8941
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