Property glut allows tenants to pick and choose flats

Property rental rates in Dubai are fluctuating wildly as renters enjoy a glut of available homes, a leading industry analyst said yesterday. People looking for a new home had become more discerning and were able to pick and choose the best flats and villas as supply rocketed, said Jesse Downs, the head of research at the Landmark Advisory, a division of Landmark Properties.

Her assessment came as Advisory released its fifth leasing report into market trends in Dubai. The study found an uneven pattern of rents across the emirate, but an increase in the number of people moving to Dubai to take advantage of low rents and high supply. The extra space was due to people leaving the city to escape the summer heat or because of job cuts in the credit crunch, combined with a number of new property developments being finished, the report said.

Prices varied significantly, with one-bedroom apartments in Dubai Marina costing between Dh55,000 (US$14,970) and Dh115,000 a year to rent, the report revealed. Two-bedroom flats in Jumeirah Lake Towers are being rented for between Dh68,000 and Dh120,000 while three-bedroom apartments in Jumeirah Beach Residence are going from Dh150,000 and Dh200,000. "Pricing trends are a bit chaotic in Dubai at the moment," said Ms Downs. "Some are rising and some are falling within the same geographical areas.

"Previously, housing was based primarily on location but now there are a whole other set of factors which are influencing people. "People are looking at what amenities are available, how complete the development is and the quality of the construction, both in terms of design and functionality." Ms Downs said the increase in supply was driving down prices and poorer-quality homes were remaining empty.

"Consumers are in the driving seat. They are being more selective about what they are prepared to accept." Andrew Chambers, the managing director of Asteco, the UAE's largest property services firm, agreed that the Dubai market could not be as easily categorised by geographical region. "People are now quite discerning, because the market in Dubai gives them real choice," he said. "Before there was such competition for properties that people would take the first thing they saw. Now they have a chance to see a few properties. They can pick and choose.

"The properties which are particularly vulnerable are those which are poorly finished or designed or have poor access. "If people have to go through a building site to get to their new home, they shy away from those properties. Who wants to live in a building site?" Landmark Advisory said the fluctuating prices were part of the price correction process. "The uneven movement of rents across Dubai points to continued volatility, as the market continues the process of price correction and discovery," the report said.

Ms Downs added: "Isolated rental adjustments are symptomatic of specific and transient patterns that are likely to stabilise in the short to medium term." She said many existing Dubai residents were taking advantage of the falling prices to upgrade to a larger or better-quality home, while other people who shared a home to save money were now able to find a place of their own. Others who were forced to move out of the city to districts such as Sharjah owing to the previously high prices were coming back.

The new data come weeks after Asteco published its second-quarter property figures, which showed villa rents in Dubai had fallen by almost a quarter in 12 weeks, while apartment rents dropped by more than a fifth in the same period. chamilton@thenational.ae

UAE currency: the story behind the money in your pockets

How Voiss turns words to speech

The device has a screen reader or software that monitors what happens on the screen

The screen reader sends the text to the speech synthesiser

This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen

A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB

The speech synthesisers VOISS develops are free

Subsequent computer versions will include improvements such as wireless keyboards

Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser

Partnerships planned during Expo 2020 Dubai to add more languages

At least 2.2 billion people globally have a vision impairment or blindness

More than 90 per cent live in developing countries

The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

Pharaoh's curse

British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.

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