THE report shows that banks are slashing arrangements fees and timescales to process approvals in an attempt to attract investors while residential villa units have seen a slowdown in value reduction when compared to the last three months of 2010, especially in the higher end of the marketTHE residential property market in Dubai is stabilising with transactions rising in January and February helped by a resurgence of finance for real estate investments, according to the latest report from Cluttons.The real estate specialist, that has had a dedicated presence in the Middle East since 1976, says in its report covering the first quarter of 2011 that lenders such as Barclays, Standard Chartered and Gulf Finance continue to fight for market share offering competitive terms to a wider range of credit worthy clients.As well as offering mortgage rates for as low as 4.99per cent, banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available.Other positive activity in the emirates property sector concerns those projects which were once on hold and now have resumed construction, as cheaper build costs allow developers to finish construction, a more favourable alternative than the costly return of investors capital.Although project completion includes the possibility of increasing mortgage defaults down the line for investors whose payments are tied to construction milestones, Gulf Finance has stated that clients facing financial hardship will be afforded the opportunity to rework their payment schemes without facing criminal prosecution under Dubais strict debt laws, which have in the past encouraged defaulters to flee the Emirate. Although these are reasons for caution, it appears that the market is learning from past mistakes.The report shows that residential villa units have seen a slowdown in value reduction when compared to the last three months of 2010, especially in the higher end of the market. Villa developments such as Arabian Ranches, Meadows and Palm Jumeirah have seen little to no movement over the last three months, which bodes well for the recovery, it says.Other villa locations, such as Victory Heights and Motor City have seen moderate drops of 3.6 per cent from the last three months of 2010.Apartment values have continued to be eroded by the oversupply of stock on the market. Again, similar to villas, the lower end of the market have seen the highest decreases, where units in areas such as Discovery Gardens and International City have fallen by 8.9per cent from last quarter.Signs of a flight to quality market shift continues to be apparent however, as units which are regarded as high end, in locations such as Dubai Marina, Old Town and Palm Jumeirah have seen drops of only 3.7% from the end of 2010, the report points out.The report also indicates that rental values for apartments continued to feel pressure from tenants who continue to take advantage of the over supplied marketplace with apartment rental figures falling between 8 and 10% compared with the previous quarter.The villa rental market has proved to be slightly more resilient in the more established freehold areas but is expected to soften as we move into the summer. Villa prices and rentals are expected to fall in some areas due to the ever increasing release of notable new freehold units in developments such as The Villa, Falcon City, Sports City and Jumeirah Village, it says.These emerging developments lack local amenities and community facilities, which is a deciding factor for prospective tenants and owner-occupiers before they invest. The lack of these facilities contributes to the desirability and demand of such stock, which in turn cause values to drop further and puts additional pressure on the demand of some more known areas, it adds.
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