• 15 Jan 2018

    Dubai’s most expensive communities to rent or buy

    Emirates Hills is the most expensive villa community to buy or rent a property in Dubai, according to Propertyfinder Group, which has analysed the emirate’s priciest areas.

    According to the real estate portal, those looking to buy in the luxury villa community would shell out Dh2,604 per square foot to live there. Palm Jumeirah takes second position at Dh2,437 per sq ft, while The Lakes community, which sits next to Emirates Hills, comes in third at Dh1,369.

    “Even with real estate prices dropping across the country, luxury living still comes at a premium,” Propertyfinder Group said in a report on Monday.

    property-prices

    A square foot in Emirates Hills costs 243 per cent more, and in Palm Jumeirah 221 per cent more, than the median asking price in Jumeirah Village Circle, the least expensive area in Dubai, Propertyfinder said.

    The three top communities for purchasing villas are also the top three most expensive villa communities to rent, with Emirates Hills costing tenants Dh80 per sq ft, Palm Jumeirah Dh75 per sq ft and The Lakes Dh74 per sq ft.

    Residential sales and rental prices in the UAE continued to fall between April and October, encouraging renters to consider buying properties, according to Propertyfinder Group’s 2017 Trends study released last month. Real estate prices and rents in the UAE have fallen over the past two years due to the economic slowdown, job cuts and lower housing allowances amid an increase in supply in some communities.

    Mario Volpi, the chief sales officer at Kensington Exclusive Properties, said Emirates Hills continues to attract wealthy buyers “due to its exclusionary and privileged trademark and it has been the ambition of many to own a villa in this sought after community”.property

    Those looking for a deal on a luxury apartment may also struggle. Downtown Dubai, the most expensive apartment community to rent in, costs tenants Dh117 per sq ft, also making it the most expensive rental community in the emirate overall, 31 per cent more costly than Dubai’s median rental price of Dh89 per sq ft.

    Old Town was close behind at Dh115 per sq ft and The Views, which is located next to the Greens, comes in at Dh109 per sq ft.

    Buying an apartment in a luxury area is also a costly option with Downtown Dubai the most expensive community at Dh2,132 per sq ft, followed by Old Town at Dh1,965.

    “Downtown apartments command a higher rate per square foot than the average due to the fantastic lifestyle the area has to offer,” said Mr Volpi. “It is already a world-class destination but it continues to be further developed and improved upon. Having the Burj Khalifa, dancing fountains, world’s largest mall, Dubai opera etc. all in close proximity, will obviously be the magnet to attract the well-heeled of Dubai.”Property

    Luxury areas such as Emirates Hills and Downtown Dubai, though, are not immune to price declines, in line with the overall market, according to Mr Volpi. Rents in downtown were on average 15 per cent higher in December 2016, compared with December 2017, he said.

    “The trend for residential rents in 2018 is for a continuation of softening prices,” said Mr Volpi. “There is likely to be more potential downward movement for Downtown due to the larger available choice of apartments and the likelihood of more inventory being released.”

  • 15 Jan 2018

    VAT could impact property market in 2018, increase costs, JLL says

    The introduction of value added tax (VAT) will bring volatility and uncertainty to the UAE’s property sector, which is expected to continue to decline in 2018 amid increased supply in some segments of the market, according to broker JLL Mena.

    The five per cent levy, introduced on January 1, does not apply to residential rents and first supply of new homes, but is already adding pressure to an already subdued property market, which suffered declines last year.

    “The UAE real estate industry is entering into a transitional phase, with VAT now in effect and key stakeholders seeking to decipher its immediate and longer term impact,” said Craig Plumb, Head of Research at JLL MENA.

    “Although VAT does not apply to residential rents and sales of new residential property, other real estate sectors could be negatively impacted by increased costs and cash flow challenges.”

    Weak economic growth, jobs cuts, lower housing allowances and increase in supply hit the UAE’s property sector last year as both rents and prices continued to slide in some segments of the market.

    In Dubai, apartment prices in the fourth quarter dropped 4.2 per cent year-on-year, while villa prices dipped 2.4 per cent year-on-year, according to JLL. Declines were steeper in Abu Dhabi, with apartment prices plummeting 14 per cent year on year in the fourth quarter and villa prices plunging 12 per cent year-on-year.

    Nevertheless, off-plan residential sales in Dubai rose to their highest level in 2017 since the 2008 financial crisis, with their share of total transactions rising to 60 per cent in 2017 from 10 per cent in 2010 thanks to attractive payment plans by developers. A total of 25,600 off plan properties were bought in 2017, compared with more than 34,800 sales recorded in 2008.

    The UAE government introduced VAT this year as part of plans of shoring dwindling government income from oil. The levy is creating complications in some sectors in its early days of implementation, including real estate.

    “One of the main complications for the construction sector will be the treatment of goods delivered after 1 January 2018 where prices have already been fixed,” said JLL. “The main concern for contractors will be the impact of VAT on cash flows, which could lead to a downward revision in payment times in construction contracts.”

    An expected oversupply in the property market is another concern in 2018. In Dubai, around 570,000 units of new supply could enter the market by 2020, representing an average annual increase of 8 per cent, according to JLL.

    “The recent activity in the [Dubai residential] market suggests that confidence has returned to both investors and developers, however it is worth noting that the number of new launches are significantly below their peak levels in 2006/2007 and the volume and the value of sales are also below levels recorded during 2013/2014,” the report said.

    “As the market absorbs additional units, it is expected that prices will continue adjusting (downwards) with occupancy levels following a similar trend as supply growth outpaces potential demand.”

  • 15 Jan 2018

    Rents fall in popular areas of Dubai, Sharjah

    Dubai: Existing as well as new tenants are successfully negotiating hefty discounts from landlords as house rents rates continue to drop sharply in Dubai and Sharjah, real estate agents and residents told Gulf News on Monday.

    According to real estate agents, the supply is much greater than the demand, giving tenants the leverage to negotiate better rents.

    Taking advantage of the market, tenants are getting discounted rents even in prime areas like Bur Dubai, Gold Souq and Garhoud in Dubai, while Sharjah areas like Al Majaz, King Faisal Street and Al Khan have also witnessed significant drops in rent.

    The drop has created a new buzz in the real estate market with a lot of people trying to take advantage of the situation, going for cheaper options.
    The situation has given one section of the market a field day — the real estate brokers.

      We have been paying Dh95,000 for our two bedroom apartment for the last five years, but this year we could negotiate with the landlord and we got a discount of Dh5,000.”

    – Sajjad Ahmad | A trader based in the Gold Souq area for the last five years

    “It’s a customer’s market now. The rents have gone down between 20 to 30 per cent in some areas and that has given people an opportunity to either negotiate with their landlords or look for other options, keeping us busy,” said Imran Khateeb, sales manager at Mak Homes Real Estate.

    Mohammad Khalid has been living in a studio apartment in Al Baraha for almost six years, paying a higher rent after each renewal, but for the first time last year he was happy to get a discount.

    “When I rented this apartment in 2012, I was paying Dh25,000 per year and it kept increasing every year and almost doubled to 43,000 in 2016. Thankfully, a lot of apartments in the building were vacant and I could negotiate with the management for a discount. This year I got further discount and I now pay Dh32,000,” said Khalid, an Indian expatriate.

    Gold Souq, one of Dubai’s busiest commercial districts, where the demand for a commercial or residential property never goes down, the tenants are finally getting some relief.

    “We have been paying Dh95,000 for out two bedroom apartment for the last five years, but this year we could negotiate with the landlord and we got a discount of Dh5,000. Though it is not significant but getting a discount in Gold Souq is not easy because there is always a demand, but the situation is changing now,” said Sajjad Ahmad, a trader based in the Gold Souq area for the last five years.

    The situation is not much different in Sharjah either.

    Yasir Muallim has been living in a two bedroom apartment in the HSBC Building on King Faisal Street for 15 years and has seen both the highs and lows of the real estate market.

    “I have lived in the same apartment for 15 years now. I first rented it for Dh34,000 and has paid as high as Dh50,000 when the market was booming. Last few years I have been paying Dh44,000 but this year I got a reduced rate of Dh40,000,” said Muallim, who is a senior manager with a leading watch retailer.

    Shiva Kumar, another long time Sharjah resident, got an event bigger discount.

    “I have been staying in the same apartment for 18 years and I was paying Dh46,000 last year. This year during the renewal they offered me 44,000 but I could negotiate with them and get an additional 2,000 dirhams discount,” said Kumar, who is based in Jamal Abdul Nasir Street for the last two decades.

    In Al Khan, another sought after area in Sharjah, Abu Mousa got a discount of Dh4,000 for his one bedroom apartment.

    Real estate agent Salahuddin Sarfaraz says that the slump is not restricted to a few areas or the residential properties alone.

    “Even the commercial properties are going at lower price in prime locations like Port Saeed near Deira City Centre. We used to rent out offices in Port Saeed for around Dh130 per square feet, but now it is going for around Dh100 per square feet and it might go even lower,” said Sarfaraz, General Manager of Jukaku Real Estates.

    He added that even areas like Bur Dubai and Al Mankhool, which always had availability issues resulting in increasing rents, are seeing a slump now.
    “There was a time when we would struggle to find a single apartment available in Bur Dubai, now the situation has changed, so a two bedroom apartment is now available for between Dh85,000 and Dh80,000 down from Dh110,000 to Dh120,000,” he added.

    Another area that, according to Sarfaraz, has seen a big hit is Jumeirah, where villas are hardly finding any takers.

    “In Jumeirah, a 3-4 bedroom villa that was earlier going for 250,000 per year is now available for Dh180,000, still the availability is very high. There is a similar situation in Garhoud and Mirdiff, customers are getting picky since there are a lot of options,” added Sarfaraz.

  • 15 Jan 2018

    Revealed: Dubai’s most expensive communities

    Downtown Dubai and the nearby Old Town community are the most expensive areas to rent and buy apartments, according to new research from Propertyfinder Group.

    According to the research, the most expensive area to buy an apartment is downtown Dubai, with an average price per square foot of AED 117 ($31), followed by Old Town at AED 115 ($31), The Views at AED 109 ($29), DIFC at AED 102 ($27) and Dubai Marina at AED 99 ($26).

    Similarly, Downtown Dubai and Old Town were found to be the most expensive areas to buy an apartment, with average prices of AED 2,132 ($580) and AED 1,965 ($534) per square foot, respectively, followed by Palm Jumeirah at AED 1,838 ($500), DIFC at AED 1,796 ($488) and Dubai Marina at AED 1,570 ($427).

    For villas, Emirates Hills was found to be the most expensive community to rent, with an average price per square foot of AED 80 ($21), followed by Palm Jumeirah at AED 75 ($20), The Lakes at AED 74 ($20), The Springs at AED 62 ($16) and Dubai Land at AED 61 ($16).

    Emirates Hills, Palm Jumeirah and The Lakes were also found to be the most expensive areas to buy villas, with average prices per square foot of AED 2,604 ($708), AED 2,437 ($663) and AED 1,369 ($372), respectively. The top five were rounded out by Jumeirah Islands with an average price per square foot of AED 1,313 ($357) and Meadows, with AED 1,220 ($332).

    Modest declines in rent
    Regarding rents, in the Propertyfinder report group chief commercial officer Lukman Hajje wrote that “while a few communities have witnessed modest increases, the majority have seen the low single digit percentage declines in asking prices over the past six months.”

    “This can be directly attributable to the level of new stock being handed over,” he added. “Many of these developments were sold to investors, some of whom had hoped to make a capital gain and flip or sell at or prior to completion.”

    Hajje noted, however, that many of these speculators into buy to let investors, which affects not only individual developments but surrounding areas with similar price points.

Dubai’s most expensive communities to rent or buy

Emirates Hills is the most expensive villa community to buy or rent a property in Dubai, according to Propertyfinder Group, which has analysed the emirate’s priciest areas.

According to the real estate portal, those looking to buy in the luxury villa community would shell out Dh2,604 per square foot to live there. Palm Jumeirah takes second position at Dh2,437 per sq ft, while The Lakes community, which sits next to Emirates Hills, comes in third at Dh1,369.

“Even with real estate prices dropping across the country, luxury living still comes at a premium,” Propertyfinder Group said in a report on Monday.

property-prices

A square foot in Emirates Hills costs 243 per cent more, and in Palm Jumeirah 221 per cent more, than the median asking price in Jumeirah Village Circle, the least expensive area in Dubai, Propertyfinder said.

The three top communities for purchasing villas are also the top three most expensive villa communities to rent, with Emirates Hills costing tenants Dh80 per sq ft, Palm Jumeirah Dh75 per sq ft and The Lakes Dh74 per sq ft.

Residential sales and rental prices in the UAE continued to fall between April and October, encouraging renters to consider buying properties, according to Propertyfinder Group’s 2017 Trends study released last month. Real estate prices and rents in the UAE have fallen over the past two years due to the economic slowdown, job cuts and lower housing allowances amid an increase in supply in some communities.

Mario Volpi, the chief sales officer at Kensington Exclusive Properties, said Emirates Hills continues to attract wealthy buyers “due to its exclusionary and privileged trademark and it has been the ambition of many to own a villa in this sought after community”.property

Those looking for a deal on a luxury apartment may also struggle. Downtown Dubai, the most expensive apartment community to rent in, costs tenants Dh117 per sq ft, also making it the most expensive rental community in the emirate overall, 31 per cent more costly than Dubai’s median rental price of Dh89 per sq ft.

Old Town was close behind at Dh115 per sq ft and The Views, which is located next to the Greens, comes in at Dh109 per sq ft.

Buying an apartment in a luxury area is also a costly option with Downtown Dubai the most expensive community at Dh2,132 per sq ft, followed by Old Town at Dh1,965.

“Downtown apartments command a higher rate per square foot than the average due to the fantastic lifestyle the area has to offer,” said Mr Volpi. “It is already a world-class destination but it continues to be further developed and improved upon. Having the Burj Khalifa, dancing fountains, world’s largest mall, Dubai opera etc. all in close proximity, will obviously be the magnet to attract the well-heeled of Dubai.”Property

Luxury areas such as Emirates Hills and Downtown Dubai, though, are not immune to price declines, in line with the overall market, according to Mr Volpi. Rents in downtown were on average 15 per cent higher in December 2016, compared with December 2017, he said.

“The trend for residential rents in 2018 is for a continuation of softening prices,” said Mr Volpi. “There is likely to be more potential downward movement for Downtown due to the larger available choice of apartments and the likelihood of more inventory being released.”

15 Jan 2018

VAT could impact property market in 2018, increase costs, JLL says

The introduction of value added tax (VAT) will bring volatility and uncertainty to the UAE’s property sector, which is expected to continue to decline in 2018 amid increased supply in some segments of the market, according to broker JLL Mena.

The five per cent levy, introduced on January 1, does not apply to residential rents and first supply of new homes, but is already adding pressure to an already subdued property market, which suffered declines last year.

“The UAE real estate industry is entering into a transitional phase, with VAT now in effect and key stakeholders seeking to decipher its immediate and longer term impact,” said Craig Plumb, Head of Research at JLL MENA.

“Although VAT does not apply to residential rents and sales of new residential property, other real estate sectors could be negatively impacted by increased costs and cash flow challenges.”

Weak economic growth, jobs cuts, lower housing allowances and increase in supply hit the UAE’s property sector last year as both rents and prices continued to slide in some segments of the market.

In Dubai, apartment prices in the fourth quarter dropped 4.2 per cent year-on-year, while villa prices dipped 2.4 per cent year-on-year, according to JLL. Declines were steeper in Abu Dhabi, with apartment prices plummeting 14 per cent year on year in the fourth quarter and villa prices plunging 12 per cent year-on-year.

Nevertheless, off-plan residential sales in Dubai rose to their highest level in 2017 since the 2008 financial crisis, with their share of total transactions rising to 60 per cent in 2017 from 10 per cent in 2010 thanks to attractive payment plans by developers. A total of 25,600 off plan properties were bought in 2017, compared with more than 34,800 sales recorded in 2008.

The UAE government introduced VAT this year as part of plans of shoring dwindling government income from oil. The levy is creating complications in some sectors in its early days of implementation, including real estate.

“One of the main complications for the construction sector will be the treatment of goods delivered after 1 January 2018 where prices have already been fixed,” said JLL. “The main concern for contractors will be the impact of VAT on cash flows, which could lead to a downward revision in payment times in construction contracts.”

An expected oversupply in the property market is another concern in 2018. In Dubai, around 570,000 units of new supply could enter the market by 2020, representing an average annual increase of 8 per cent, according to JLL.

“The recent activity in the [Dubai residential] market suggests that confidence has returned to both investors and developers, however it is worth noting that the number of new launches are significantly below their peak levels in 2006/2007 and the volume and the value of sales are also below levels recorded during 2013/2014,” the report said.

“As the market absorbs additional units, it is expected that prices will continue adjusting (downwards) with occupancy levels following a similar trend as supply growth outpaces potential demand.”

15 Jan 2018

Rents fall in popular areas of Dubai, Sharjah

Dubai: Existing as well as new tenants are successfully negotiating hefty discounts from landlords as house rents rates continue to drop sharply in Dubai and Sharjah, real estate agents and residents told Gulf News on Monday.

According to real estate agents, the supply is much greater than the demand, giving tenants the leverage to negotiate better rents.

Taking advantage of the market, tenants are getting discounted rents even in prime areas like Bur Dubai, Gold Souq and Garhoud in Dubai, while Sharjah areas like Al Majaz, King Faisal Street and Al Khan have also witnessed significant drops in rent.

The drop has created a new buzz in the real estate market with a lot of people trying to take advantage of the situation, going for cheaper options.
The situation has given one section of the market a field day — the real estate brokers.

  We have been paying Dh95,000 for our two bedroom apartment for the last five years, but this year we could negotiate with the landlord and we got a discount of Dh5,000.”

– Sajjad Ahmad | A trader based in the Gold Souq area for the last five years

“It’s a customer’s market now. The rents have gone down between 20 to 30 per cent in some areas and that has given people an opportunity to either negotiate with their landlords or look for other options, keeping us busy,” said Imran Khateeb, sales manager at Mak Homes Real Estate.

Mohammad Khalid has been living in a studio apartment in Al Baraha for almost six years, paying a higher rent after each renewal, but for the first time last year he was happy to get a discount.

“When I rented this apartment in 2012, I was paying Dh25,000 per year and it kept increasing every year and almost doubled to 43,000 in 2016. Thankfully, a lot of apartments in the building were vacant and I could negotiate with the management for a discount. This year I got further discount and I now pay Dh32,000,” said Khalid, an Indian expatriate.

Gold Souq, one of Dubai’s busiest commercial districts, where the demand for a commercial or residential property never goes down, the tenants are finally getting some relief.

“We have been paying Dh95,000 for out two bedroom apartment for the last five years, but this year we could negotiate with the landlord and we got a discount of Dh5,000. Though it is not significant but getting a discount in Gold Souq is not easy because there is always a demand, but the situation is changing now,” said Sajjad Ahmad, a trader based in the Gold Souq area for the last five years.

The situation is not much different in Sharjah either.

Yasir Muallim has been living in a two bedroom apartment in the HSBC Building on King Faisal Street for 15 years and has seen both the highs and lows of the real estate market.

“I have lived in the same apartment for 15 years now. I first rented it for Dh34,000 and has paid as high as Dh50,000 when the market was booming. Last few years I have been paying Dh44,000 but this year I got a reduced rate of Dh40,000,” said Muallim, who is a senior manager with a leading watch retailer.

Shiva Kumar, another long time Sharjah resident, got an event bigger discount.

“I have been staying in the same apartment for 18 years and I was paying Dh46,000 last year. This year during the renewal they offered me 44,000 but I could negotiate with them and get an additional 2,000 dirhams discount,” said Kumar, who is based in Jamal Abdul Nasir Street for the last two decades.

In Al Khan, another sought after area in Sharjah, Abu Mousa got a discount of Dh4,000 for his one bedroom apartment.

Real estate agent Salahuddin Sarfaraz says that the slump is not restricted to a few areas or the residential properties alone.

“Even the commercial properties are going at lower price in prime locations like Port Saeed near Deira City Centre. We used to rent out offices in Port Saeed for around Dh130 per square feet, but now it is going for around Dh100 per square feet and it might go even lower,” said Sarfaraz, General Manager of Jukaku Real Estates.

He added that even areas like Bur Dubai and Al Mankhool, which always had availability issues resulting in increasing rents, are seeing a slump now.
“There was a time when we would struggle to find a single apartment available in Bur Dubai, now the situation has changed, so a two bedroom apartment is now available for between Dh85,000 and Dh80,000 down from Dh110,000 to Dh120,000,” he added.

Another area that, according to Sarfaraz, has seen a big hit is Jumeirah, where villas are hardly finding any takers.

“In Jumeirah, a 3-4 bedroom villa that was earlier going for 250,000 per year is now available for Dh180,000, still the availability is very high. There is a similar situation in Garhoud and Mirdiff, customers are getting picky since there are a lot of options,” added Sarfaraz.

15 Jan 2018

Revealed: Dubai’s most expensive communities

Downtown Dubai and the nearby Old Town community are the most expensive areas to rent and buy apartments, according to new research from Propertyfinder Group.

According to the research, the most expensive area to buy an apartment is downtown Dubai, with an average price per square foot of AED 117 ($31), followed by Old Town at AED 115 ($31), The Views at AED 109 ($29), DIFC at AED 102 ($27) and Dubai Marina at AED 99 ($26).

Similarly, Downtown Dubai and Old Town were found to be the most expensive areas to buy an apartment, with average prices of AED 2,132 ($580) and AED 1,965 ($534) per square foot, respectively, followed by Palm Jumeirah at AED 1,838 ($500), DIFC at AED 1,796 ($488) and Dubai Marina at AED 1,570 ($427).

For villas, Emirates Hills was found to be the most expensive community to rent, with an average price per square foot of AED 80 ($21), followed by Palm Jumeirah at AED 75 ($20), The Lakes at AED 74 ($20), The Springs at AED 62 ($16) and Dubai Land at AED 61 ($16).

Emirates Hills, Palm Jumeirah and The Lakes were also found to be the most expensive areas to buy villas, with average prices per square foot of AED 2,604 ($708), AED 2,437 ($663) and AED 1,369 ($372), respectively. The top five were rounded out by Jumeirah Islands with an average price per square foot of AED 1,313 ($357) and Meadows, with AED 1,220 ($332).

Modest declines in rent
Regarding rents, in the Propertyfinder report group chief commercial officer Lukman Hajje wrote that “while a few communities have witnessed modest increases, the majority have seen the low single digit percentage declines in asking prices over the past six months.”

“This can be directly attributable to the level of new stock being handed over,” he added. “Many of these developments were sold to investors, some of whom had hoped to make a capital gain and flip or sell at or prior to completion.”

Hajje noted, however, that many of these speculators into buy to let investors, which affects not only individual developments but surrounding areas with similar price points.

15 Jan 2018

All you need to know about registering for VAT?

Dubai: According to the executive regulations on value added tax (VAT) published last week, the mandatory registration threshold is Dh375,000.

This means that anyone with a turnover of Dh375,000 or more is required to register their business for VAT, the Federal Tax Authority (FTA) and Ministry of Finance (MoF) said in the recently release regulations.

The voluntary registration threshold is Dh187,500, with companies of that size or above able to register for VAT too.
The failure of a taxable person or business to submit a registration application within the time frame specified in the tax law is liable for a Dh20,000 fine.

Also according to the executive regulations, companies are able to register as a tax group.

Through this mechanism, more than one company can register for VAT as a group, under a single common control, according to Dubai-based Jitendra Consulting Group. They say that the main benefit of group registration is to simplify the procedures and save costs through consolidated tax returns and a single VAT registration.

The group’s tax returns and payments are carried out by the member who acts as a representative of the group, the FTA has stated. All the members are jointly liable, however.

VAT rules VAT rules

VAT rules

 

6 Dec 2017

UAE’s Federal Tax Authority announces full VAT supplies list

The Federal Tax Authority (FTA) has announced the supplies that will be subject to Value Added Tax (VAT) as of January 1, 2018, revealing selected sectors that will be assigned zero-rated tax, such as education, healthcare, oil and gas, transportation and real estate.

Selected supplies in sectors such as transportation, real estate, financial services will be completely exempt from VAT, whereas certain government activities will be outside the scope of the tax system (and, therefore, not subject to tax).

These include activities that are solely carried out by the government with no competition with the private sector, activities carried out by non-profit organisations.

The UAE Cabinet is expected to issue a decision to identify the government bodies and non-profit organisations that are not subject to VAT.

The below table outlines all supplies that will be subject to the 5% Value Added Tax, as well as zero-rated supplies and exempt supplies:

VAT in education

UAE vat in all sectors

 

6 Dec 2017

Can you buy a home with Dh10,000 salary in Dubai?

There is a property for every income bracket in Dubai. The lower sales prices and attractive payment plans offered by developers in Dubai are resulting in more first-time home buyers hopping on the property bandwagon. The introduction of new innovative mortgage products by some local banks has also contributed towards this increased activity.

Even someone with a salary of Dh10,000 can climb onto the property ladder today, provided they can arrange for the up-front payment and registration charges.

home buying plan

“There are enough properties available to cater across a wide range of salary brackets. Prices and accessibility criteria for a home mortgage, traditionally the two biggest barriers for new entrants to the property market, have been lowered, thus resulting in an uptick in market activity,” says Lynnette Abad, partner and head of Property Monitor/Cavendish Maxwell.

Apartments are the achievable properties for salaries between Dh10,000 to Dh15,000.

qouate

“The average one-bedroom apartment in new residential areas such as Dubai Silicon Oasis, Liwan, etc., is worth about Dh600,000 with a down payment of Dh150,000 and Dh30,000 in registration expenses. The buyer has to pay about Dh2,200 a month. This is easily achievable for most people earning Dh15000+ a month. This is much less than their rent,” suggests Sanjay Chimnani, managing director, Raine & Horne Dubai.

This year, the top areas for affordable properties to one with a monthly salary of Dh10,000 are (in order) International City, Jumeirah Village Circle (JVC), Al Furjan and Dubai South, estimates Property Monitor, a real estate intelligence platform.

For someone with a monthly salary of Dh15,000, the top areas with affordable properties are Dubai South, JVC, Business Bay and Dubai Sports City, the consultancy adds.

However, if you are looking to buy a villa or a townhouse, it would require a monthly salary of Dh25,000. “It will fetch you a townhouse in master-planned communities such as Town Square and Reem, Mira. Some of the other top areas in this salary bracket are Dubai Marina, Business Bay and The Lagoons,” informs Abad.

The challenge for most buyers is to arrange for the down payment plus registration costs of about 30 per cent. “If this was to be reduced to 15 per cent, we would see an even greater shift to ownership in this market,” suggests Chimnani.

However, the moot question is whether a person earning Dh10,000 a month is eligible for a mortgage. Provided the customer does not have any major loans (personal, credit card and auto), s/he would be eligible for a house loan of up to 25 years, subject to age criteria which restricts payments to the age of 65.

“People earning Dh10,000 and above can apply for a mortgage. The minimum salary requirement for a mortgage is Dh10,000. However, there are only a few banks who do mortgages for clients with Dh10,000 income and, therefore, options for these clients are limited. Majority of the banks require a minimum salary of Dh15,000 and above,” says Carol Monis, head of mortgages, MortgageMe.ae, a group of mortgage brokers in Dubai.

She adds that “most of our mortgage clients are end-users who fall into an income bracket of Dh20,000 to Dh25,000”.

Dhiren Gupta, managing director, 4C Mortgage Consultancy, adds in the same vein that the average income group buying property in Dubai is around Dh25,000 to Dh35,000 and they are primarily buying mid-priced property worth of Dh1.5 million to Dh2 million.

“With such income, they can easily qualify for a loan, barring they do not have pre-existing liabilities and age limitation is not a barrier. Moreover, banks are more comfortable to funding such profiles wherein the property will be utilised for self-use,” concludes Gupta.

3 Dec 2017

Sheikh Mohammed signs VAT Executive Regulation

The Ministry of Finance, MoF, Monday announced that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, signed the Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT.

The Regulation defines VAT as the 5% tax imposed on the import and supply of goods and services at each stage of production and distribution, including what is a deemed supply, with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decree-Law.

The tax will go into force effective January 2018, and all business have to take all necessary measures to avoid the risk of non-registration by 1st January, 2018, which would entail fines as stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

Commenting on the milestone, Younis Haji Al Khoori, Undersecretary of MoF, said, “Today’s signing of the Executive Regulation by the Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, marks a new milestone in the application of an efficient taxation system in line with best international standards with the ultimate objective of improving performance of primary sectors and enhancing social welfare.”

The first title of the Regulation includes the definitions of terms used, while the second title deals with supply, which includes articles regulating the supply of goods and services, as well as supplies that consist of more than one component and the exceptions related to deemed supplies.

The third title of the document tackles the subject of registration, such as mandatory and voluntary registration, related parties, conditions to be met to register tax groups and appointing a representative member, deregistration, exception from registration, registration on law coming into effect and obligations to be met before deregistration.

Meanwhile, the fourth title looks into rules relating to supply, including articles on the date of supply, place of supply for goods, place of supply of services for real estate, transport services, telecommunications and electronic services, intra-GCC supplies, the market value, prices to be inclusive of tax, discounts, subsidies and vouchers.

Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.

Title seven clarifies provisions relating to products and services exempt from value added tax, namely: the supply of certain financial services as specified in the Executive Regulation, the supply of residential (non-zero-rated) buildings either by sale or lease, the supply of bare land, and the supply of local passenger transport.

The eighth title of the Regulation then addresses accounting for tax on specific supplies and includes articles relating to supplies with more than one component, general provisions in relation to import of goods and applying the reverse charge on goods and services, as well as moving goods to implementing states and imports by non-registered persons.

In title nine, the Executive Regulation address Designated Zones in article (51), while title 10 provides further detail on calculating due tax, recovery of input tax relating to exempt supplies, input tax not recoverable, and special cases for input tax. The following titles 11 includes article (55) on apportioning input tax and article (56) on adjusting input tax after recovery, whereas title 12 addresses the capital asset scheme in article (57) and adjustments within the capital asset scheme in article (58).

Title 13 of the Regulation includes article (59) on tax invoices, article (60) on tax credit notes and article (61) on fractions of the fils. Then in title 14, the Executive Regulation discusses Tax Periods and Tax Returns, before title 15 goes into recovery of excess tax in article (65). Adding to that, title 16 tackles recovery in other cases and includes article (66) on new housing for nationals, article (67) on business visitors, article (68) on tourists and article (69) on foreign governments.

The 17th title includes article (70) on Transitional Rules, article (71) on record-keeping requirements and article (72) on keeping records of supplies made. Meanwhile, the 18th and final titles discusses closing provisions.

28 Nov 2017

Who we are

The team, at Masterkey Properties, comprises indigenous experts in renting, selling and managing commercial properties and villas in Dubai, UAE. Established in 2006, the company has over a decade of experience in tracking new property developments and estimating trends in prime market areas that help clients in meeting their requirements. We are currently selling and leasing out properties in all areas of Dubai. We strongly believe if you have a requirement for a home or office space, we will help you find it!

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