Property Rents and Prices in Dubai by Junaid Iqbal Mohammed Memon

Dominating Factor in the Residential Sector

Junaid Iqbal Mohammed Memon has made a name for himself as a property developer and investor. Based in Dubai and London, he was responsible for the inception of the Cloud 9 Group. Being from a family of businessmen, he has learned from an early age about the intricacies of the business world which helped him establish a name as an investor. Later on, he ventured into property development and to date, he has completed a number of projects under his name. He manages and owns businesses and properties in London and Dubai.

Pressure due to oversupply continues to plague Dubai’s residential market. A recent report on the emirate’s property market performance for the second quarter of 2018 showed that there has been a continued softening of the rental rates for villas and apartments. The first quarter saw a softening of 4% and 2% for the second quarter. The average sales prices for villa have also remained flat for the same period.

According to the latest data, affordability remains to be a dominant factor in the emirate’s residential sector. The mid-market segment witnessed the highest uptake. It appears that lately, one-time tenants are trying to take advantage of a variety of affordable and flexible payment plans and have chosen to buy properties.

One of the top trends this year is affordability. This is especially true with the large amount of supply that is steadily entering the market. As a result, developers are now focusing on a mid-market segment that is investment –active. The prices are being kept attractive through a variety of smaller units along with flexible payment options. This has piqued the interest of a number of would-be investors.

This report further showed that looking from the viewpoint of apartment sales, Business Bay has rebounded quite well after its last quarter decline of 9%. At the time, it was considered as the steepest decline in the emirate. However, it has notched a 4% increase this quarter at AED 1,226 per square feet. Still, this figure is way below the price for the 2017 Q2, which was at AED 1,268 per square feet.

Another standout performer is Jumeirah Village Circle. For this quarter, it has increased its prices by 6% to now AED 871 per square feet. This was after it bore the brunt of the 8% decrease that it experienced in Q1. The only other area which also saw growth was Dubai Motor City where it increased by 2% and is now priced at AED 822 per square feet.

The steepest decline was experienced by International City at 7%. The prices have dropped to AED 589 per Square feet. The Greens also experienced its fourth-quarter decline at 2% leaving prices now at AED 1,077 per square feet.

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Several factors are being looked into as the cause for the decline in the rental rates. These include reduced prices and greater choices. Going forward, landlords and developers should focus on quality. This is because tenants now proactively look for the cheaper options or go for those units that are better quality for the same price as the unit that they are presently renting at. Learn more about the property development market by reading about Junaid Iqbal Mohammed Memon online. You can also follow Junaid Iqbal Mohammed Memon on Twitter. Learn more about Junaid Iqbal Mohammed Memon by checking out his website here.

Dubai’s Real Estate Market Faces Oversupply Concerns

Oversupply Plagues Dubai Property Market Amid Growing Competition

With property demand stabilising for the past year, the real estate market in Dubai seems to be facing increasing oversupply concerns. This is happening as competition continues to grow among developers.

The past years have seen a number of companies entering the market. As a result, there has been a decline that is faced by the sector all throughout this year. As a result, many developers are forced to get their prices dropped as a result of the sales slowdown.

GGICO or Gulf General Investment Company engineering head, Bshir Osman, stated that he believes that there is oversupply on the market for this particular time. He also stated that there is a need for the oversupply to be controlled. He said that developers have to force drop their prices as a result of a large number of companies that are new to the sector that decided to enter the market these recent years.

Osman said that he does not believe that the market is suffering a decline. According to him, what is happening is more along the lines of a correction. With the Expo 2020 getting closer, it is expected that things are going to be more stable.

According to the Q3 2017 JLL Overview report, the majority of the project completion in this year’s third quarter was in the form of apartments. It is expected that 3,300 are going to be delivered. The data suggests that by the end of the year 2019, about 80,000 units are going to be delivered. This is because construction activity is expected to intensify as the Expo 2020 draws closer. Of course, it is expected that the actual delivery is likely going to be quite below this particular level.

The report echoes the same sentiments that Osman held. This highlights the evidence that the sales prices for apartments and villas have been largely stable for the last quarter. There has also been a suggested increase in vacant apartments that are located in the city which includes such prime locations as the marina and Downtown Dubai.

This resulted in tenants being able to renegotiate their rents to a more affordable figure. Most of the time, this led to a downward renegotiation of 5% to 7%, based on the report revealed by JLL.

Osman further believes that the constraints are likely to be the same for next year. The same kinds of challenges are likely to be prevalent for the coming year. However, while oversupply is still going to be an issue, there are also expectations of increased market regulation. These policies are expected to bring impact to the market in the form of planned provisions for affordable homes in many of the core locations in the city.

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House Prices across the UK: What the Next Five Years Bring

Struggling home-owners in London are expected to enjoy a bit of breathing room in the next three years. However, the long-term seems to be geared towards a price bump.

Prices for homes in the northern part of the country are most likely to outperform the prices in London as well as the properties in the South East. This is a development that is likely going to be a reality in five years time if the recent price forecast from leading experts in the property market is to be considered.

Further increases in interest rates in relation to Bank of England’s base rate increase of 0.25% are likely to challenge affordability to buyers in areas where the house prices are significantly higher than the buyers’ income.
Short-term lull due to Brexit uncertainty

The prices of houses in London have seen a rise of up to 70% just n the last ten years alone. This is more than triple times faster in the country. This pushed the average pricing for houses in 2017 to £479,000 based on the data that Savills has gathered from its recently carried out research.

Compared to average income, this is 12.9 times higher. Property buyers in the capital who are first-timers are paying an average deposit that is only a little short of £100,000. Compared to the average that the rest of the UK is paying, this is about four times more. As a result, it does not come as a surprise that many Londoners, even those who are earning quite high, are now finding themselves having a hard time affording the costs involved in buying homes. This means that growth prices for houses will likely be most impacted here.

Savills is also anticipating a 1.5% fall in prices for this year alone. The next year is expected to see a further slide of 2%. The forecast, however, sees the price stagnating for the year 2019 as a result of the prevailing uncertainty following the country’s exit from the EU.

The forecast predicts £33,000 will be added to prices for hoses in the country’s capital in five years time. A boost of five percent is also anticipated to take place in 2020 which is the year that the country will officially exit the EU. However, this is only going to take place if wage, GDP, and employment will grow based on expectations.

This will then put average house price in the capital to over £500,000 by 2022. The housing market in the capital has been trying to push against affordability and mortgage regulation for a considerable time now according to Lawrence Bowles, a research analyst at Savills. Ultimately, it was the Brexit vote that became the tipping point which led to the slow-paced price growth.

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London Commercial Property Investment Approaches Record-Setting Year

Investment in the commercial real-estate sector in London is set to achieve a new record this year. This is a direct result of the influx of international buyers that are flocking to the capital.

Property adviser and real estate authority Savills is predicting that the overall volume of the transactions in the real estate market just in central London alone for this year is expected to go well beyond £20 billion. This means that the chances of it ending the year with figures higher than the record level that was set back in 2014 at £21.6 billion are indeed quite high.

The first three quarters of the year has seen a considerable growth in the transactions for commercial property in the central London area. The records show that the transactions have amounted to £14.2 billion. This is a record set by buyers that originated from a whopping 27 different countries. For the last 5 years, the capital has averaged a turnover of £6.6 billion. This has led Savills to set the prediction of the 2017 turnover to easily surpass the £20 billion thresholds and will likely be well on its way to set a new record.

Investment in commercial property in the city alone is expected to likely reach and even beat the 2014 record of £12.6 billion. The Square Mile investment for this year’s first three quarters has already outperformed the overall total for the year 2016. The volume of the sale is quite notable in September as it hits £8.5 billion at the end of the month. This is higher by six percent than the annual total for 2016 at £8.07 billion.

Savills’ Stephen Down stated that the real estate in the UK, particularly the prime assets in the capital with strong streams of income, has always appealed to a wide spectrum of investors in the international arena and it has continued to do so. Outside this particular sphere, there is also demand from a broad base of professional investors as long as the properties involved are being marketed at the right prices.

Numis Securities Director Robbie Duncan said that the volume of transaction in a commercial property market that has been recorded for this pear is quite fantastic. This further backed the fact that even after the EU referendum that took place last year, London has definitely not closed for business. Still, it is important to take into perspective that the sale of the Walkie Talkie and the Cheesegrater, two of the biggest buildings in the city, makes up for a huge part of the investment.

Duncan has also predicted that investors from Japan that are looking to diversify their portfolios are likely to explore the opportunities for investment in the capital next year. Still, the sector does require clarity, especially over the transition deal after Brexit, if it is going to maintain the high level of investment that it is clearly experiencing.

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Welcome to Junaid Iqbal Mohammed Memon Blog

A property developer who has set up his base in Dubai, he presently owns and manages several properties and businesses in Dubai, the United Kingdom, and India. He has completed several projects under his belt.

The extensive background of his family has exposed him to the world of business at an early age. He has learned early on about the importance of proper business strategies and how they can be used to maximize entrepreneurship opportunities. His interest has been mainly focused on the profitable world of development ventures. With the goal of expanding his business activities further, he made the decision to venture into the property and real estate development in 2014.

You can visit Junaid Iqbal Mohammed Memon website here.                                                To know more about  Junaid Iqbal Mohammed Memon official accounts, visit his About.me page here.