Hamptons is a leading real estate agency in the market today with a rich history spanning over 140 years across the globe. The firm offers a wide range of services including sales and leasing of residential and commercial properties, property management, international sales, valuations, market research, mortgage and advisory services.
Hampton MENA’s head of operations Niraj Masand, in an exclusive chat with Property Times, says the company is currently in an expansion mode given the positive sentiment in the emirate’s real estate market over the past few months. “In the last six to eight months, we have been in an aggressive growth mode because we can see the wave of capital entering into this market,” he says, which is bound to have a positive effect on the country’s real estate sector.
Niraj says the crisis was nothing new and it was part of the cycle that every real estate market in the world would go through. “There has to be a correction mode for everything that goes up and that’s exactly what happened in 2008. People who did not understand the real estate business were badly affected,” he says, adding when the market is affected by the crisis, it is imperative to survive and sustain one’s business rather than targeting aggressive growth or unnecessary expansion. “I knew the market would pick up in a year or two as the confidence in Dubai’s real estate market has always remained. In mid-2010, we already started sensing that within a year or so, things would start improving. So, today if you look at the market, you can understand that it has followed the international pattern where the market picks up after a lull period of couple of years. What is interesting is that internationally things pick up gradually, but the Dubai market has recovered quickly.”
Niraj says established communities in Dubai are mostly preferred by investors and end users, a trend which is driving up prices and rents in these areas while other communities continue to witness less demand because of lack of proper infrastructure and amenities. ““We see a lot of demand in established communities such as Downtown Dubai, Emirates Living, Dubai Marina etc. Arabian Ranches and Jumeirah Lakes Towers have also been doing pretty well. I think Business Bay, over the next few months, will see a huge amount of activity because of its strategic location. Once the infrastructure is ready, then you will see a huge demand for properties in this development. Already buyers are showing interest in completed properties in Business Bay which can be accessed easily.
Investors, says Niraj, are coming back to the market and a certain percentage of them will be flippers. He adds speculators are present in real estate markets across the world, not just in Dubai. “People with excess liquidity come into the market with an intention to make good return on investment in a short period of time. It happens in India, UK and all the established markets. But in Dubai, more and more serious investors will come in who will have a long-term outlook rather than short term plans of flipping the properties. The key to any successful real estate market is to have investors for a longer period of time and we are gradually seeing that there are funds and institutions that are coming in that are more interested in the long the term of return on investment the properties can generate rather than the capital appreciation they can get over a period of three months or so. These institutions are far more secure in the commercial market because the lease contracts are for a longer term compared to residential units. So they get a guaranteed income over a period of three to five years,” he says adding that the initiatives taken by master developers will help curb the entry of flippers into the market to a great extent. When the owner has to meet certain criteria such as paying a certain percentage of the total value of the property, before selling it off, then he will have a much longer term outlook than just buying today and selling tomorrow.
Hamptons has a mix of clients: investors and end users, says Niraj. “We are seeing a huge amount of demand from investors but at the same time, we can see that end users are beginning to come back to the market. We do a large percentage of business with end users these days that are much more educated than ever before, having seen what happened in the market. They know which areas are ideal for them to live in for the next four to five years, so it makes a lot of sense to purchase a property than rent it. Also people sense that the sentiment is quite positive in the market and the prices are rising as well, so it would be logical then to make the investment today. Niraj says their clients are mostly from countries that have easy access to Dubai, but, “what is interesting to notice is this trend is changing and we are seeing far more interest from different countries, so now there is a larger number of people looking at Dubai as an investment destination compared to the past few years. There is a lot of money coming in from Africa apart from Iran, Qatar, Saudi Arabia, Bahrain, Kuwait etc. A lot of buyers come from India as well because the property values there are higher compared to Dubai which attracts buyers from Pakistan also,” he says.
Right time to buy?
Niraj says this question is not applicable to end-users. “My advice to anyone planning to buy a property for their own use is that as long as you can afford the house that you are buying, go ahead and buy. There is no right time or wrong time to buy your own home,” he adds. For investors, he says the time is very good to buy since the prices and rents are growing and their investment today will give them good returns in the future.
Dubai’s Real Estate Regulatory Agency (Rera) has introduced a number of regulations to protect the rights of everyone involved; developers, real estate agents, buyers etc. “We have to give credit to Rera for the initiatives they have taken over the past few years. For instance, previously there were a lot of freelance agents but today no one is allowed to operate as a freelance agent in Dubai. Every agent has to be certified and the agencies have to be certified. Also there are laws that protect the developer and also govern the developer. Now they are planning to launch the investor protection laws. So all these regulations will make sure that everyone in the market is protected in case something goes wrong in the future and that will work in favour of the country’s real estate market,” he concludes.