MENAFN - Khaleej Times
UAE- Realty view 'very positive'
(MENAFN - Khaleej Times) The outlook for Dubai's real estate market is "very positive" and property prices will continue to appreciate nicely in the short- to medium-term period, a senior official of a real estate agency said.
SPF Realty, which aims at providing quality services to property buyers, sees significant investment in the emirate's residential and commercial real estate projects due to uncertain economic conditions in Europe and instability in some parts of the region.
"Dubai is enjoying the safe-haven status [ahead of Switzerland] as investors and property buyers prefer to put their investment in the emirate's real estate sector," Kalpesh Sampat, director of SPF Realty, told Khaleej Times in an interview.
Established in 2005 with a vision to offer holistic solutions to all property-related requirements, SPF Realty has stood firm through the ups and downs of the nascent real estate market in Dubai to emerge as a leader in the field.
It has a dedicated team of 75 members, including 50 sales and leasing consultants who evaluate each project and developer with uncompromising parameters and delivers best results to the investors.
Sharing his views on real estate growth in past seven months, Sampat said the property sector staged a smart recovery this year as investors poured money in realty projects. "Fuelled by the money coming in from Arab Spring countries in the second half of 2012, a recovery commenced to compensate for the over-correction of prices during the global financial crisis. This recovery gained momentum, with increasing money flows into Dubai driven by various catalysts, such as the situation in Europe, the collapse of the banking sector in Cyprus, geopolitical instability spreading to Syria and Egypt and investors and buyers the world over granting Dubai the No. 1 safe-haven status," he said.
Elaborating the reasons behind surging demand for residential and commercial properties in the emirate, he said people realised that prices here are cheaper compared to other leading cities in the world with comparable infrastructure and zero taxation.
"Yes, there are some indirect taxes and charges here, but they are negligible in comparison to other parts of the world. For example, a 75 per cent tax rate in France for the highest slabs. Short- and long-term capital gains on appreciation of property value in most countries are taxed at substantially high rates - an average 30 to 50 per cent in most countries of the world while in the UAE investor pays zero taxes on such capital gains," he explained.
To a question, he said the UAE emerged as safe haven in the wake of the Arab Spring, attracting regional and international money into the realty sector.
"Yes, agreed; Indians are top foreign investors in Dubai's real estate market, with transactions of over Rs132.6 billion made by them during the first half of 2013," he said, while referring to an official report.
Dubai's Land Department announced the statistics based on its semi-annual report that revealed a significant increase in funds invested in the market, reaching Rs877.5 billion.
"In the first six months of 2013, Indians bought properties worth over Rs132 billion compared to Rs149 billion they invested in the entire 2012," the report said.
Total investment of UAE nationals in the realty sector was Rs199 billion, which equalled the entire amount they spent last year.
Asked whether Dubai's property sector is heading towards another bubble or is heating up, he said it is stable and stands firm on solid ground.
"No, we don't think so. But, we sure believe that buyers and investors need to be careful in investing in off-plan projects, [such as to] ensure all Real Estate Regulatory Agency approvals are in place for the project and the developer, all money is going into escrow, ensure the developer is not launching 10-15 projects in a single year. But, as long as buyers are prudent, do not over-leverage, and over-speculate, there is no reason for any bubble as fundamentally prices are still very low," he said.
In reply to a question about permanent residency to investors who are willing to make Dubai their second home, he supports the idea and said this facility should be restricted only to genuine buyers rather than extending to commercial brokers or traders.
Sampat said the property sector will go through consolidation in the coming days in order to stay competitive in the market. However, it is difficult to describe a clear picture at this point of time.
"Yes, this is bound to happen but [it's] not sure what exact shape and form it will take," he said.
About SPF Realty's performance in first half, he said it was an "incredible" six months for the company, galvanised by its exclusive 198-villa project, Millennium Estates in Meydan, which was sold out in 60 days, compared to a scheduled timeline of eight to 12 months.
"It is another example of the extremely positive demand in the market for a compelling product. We expect to continue to deliver very good results in the next six months, with very healthy demand in general, and also by bringing to market, more exclusive projects of extremely good products."
To a question, he said the company is expected to launch a property project in the near future.
"Yes, in the near future, approximately in three months, we will launch a project. Of course, we will be representing a developer but the project which will be compelling in all respects - location, very low price compared to the market price in the area, a very interesting and favourable payment plan, and above all an extremely high quality product," Sampat said.
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