HRE News:

Invest in the “Credit Crunch”

For the last few months we have all heard in the media about the doom and gloom of the western property markets. But now with the fourth quarter of 2008 showing negative growth, it is officially confirmed that the UK economy is in recession.

Lots of our existing customers have asked us whether, in our opinion, it is still a good time to buy overseas or not. So we think it would be sensible to share our expertise of overseas markets in order to try & benefit everyone.

The Following are the points which every intelligent investor should consider before making any investment decisions.

Every economy follows a business cycle, meaning that every country’s trade can expand until it eventually peaks, before going into a recession or contraction phase.

If one economy is in recession, it is probable that somewhere around the globe, another country will be on an expansion phase. Current examples would be UK v/s the Indian or perhaps the UAE economy. The massive population growth in India with its growing GDP and expanding middle class is creating massive demand for everything and anything. Making it a very attractive and viable place for foreign direct investments.

Recently many bank account holders in the UK and US have lost the vast majority of their hard earned money or life savings. As stocks, shares & even pension funds are now worth a fraction of their previous value.

Although the price of real estate has dropped steeply in the west, with many people facing the probability of negative equity. Most experts believe that after another year or two the market will slowly begin to pick up. Albeit, not to the same artificially high valuations received immediately prior to the current downturn. So most people who have already invested in property, will be the least affected by this situation, because they own a tangible asset.

Those not already on the UK’s Property Ladder, will now find it very difficult to obtain a loan or Mortgage through one of the usual High Street Banks or Building Societies. As lenders are now scared of loaning money to people that might not be able to pay them back. Due to being made redundant, etc.

As a part of many cultures (e.g. Asians), a home or property is the first and foremost thing they would try to own when they first started earning. (Note that 40% of the property investors in UAE come from UK.)

In conclusion perhaps it is good time to investment in the booming overseas markets such as UAE, India and Malaysia.

Property prices in Ajman have shot up by 30 per cent

Property prices in Ajman have shot up by 30 per cent from January 2008 after the announcement of plans to build an international airport in the emirate. And developers could soon increase the cost of homes in some projects by a further 20 per cent, said real estate officials. But, despite the rise, properties in Ajman remain much cheaper than those in Dubai.

Streamlining the real estate sector

The much awaited clean-up job in Dubai's real estate sector has finally taken off with a number of reform measures that will eliminate wrong-doers and reinforce public confidence in Dubai's booming real estate. The newly-established Real Estate Regulatory Agency (Rera) has already identified loopholes and is plugging them. Among the measures taken are a comprehensive property price and rent index, standardising the purchase contracts, eliminating the freelance brokers and regulating them. By enacting the Trust Account Law, the Condominium Law and the Rent Law, the government is also creating the right legal framework to support the reform moves that are likely to produce a benchmark for other emirates and states in the region

All tenancy agreements to be ratified by Rera

All tenancy agreements that the landlords in Dubai issue for each residential units, will have to be ratified by the Real Estate Regulatory Authority (Rera) in the coming months. The rights to use the residential premises of Dubai's residents, majority of whom live in rented apartments and villas, are determined by a bilateral tenancy agreement between the landlord and the tenant, which, currently is not ratified or validated by any government authorities. Most tenancy agreements, that vary drastically, could be purchased from document clearing shops, typing shops and even from groceries. Dubai government will soon issue a new rent law that will help Rera to regulate the market, implement the rent cap and effectively resolve disputes through setting up a rent dispute committee that will eventually result in an arbitration facility for the property sector.

Real Estate News:

Disclaimer:

The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision. The content of the HRE Web site does not constitute advice or a recommendation by HRE and should not be relied upon in making (or refraining from making) any decision relating to investments or any other matter.

HRE LTD cannot be held liable or responsible in any way for any opinions, suggestions, recommendations or comments made by any of the contributors to the various columns on the HRE Web site nor do opinions of contributors necessarily reflect those of HRE LTD.

In no event shall HRE LTD. be liable for any damages whatsoever, including, without limitation, direct, special, indirect, consequential, or incidental damages, or damages for lost profits, loss of revenue, or loss of use, arising out of or related to the HRE LTD. Web site or the information contained in it, whether such damages arise in contract, negligence, tort, under statute, in equity, at law or otherwise.