Vol:11 Mar/08
Ground realty in Northern Emirates takes off
Ground realty in Northern Emirates takes off
The Northern Emirates in the UAE comprises the emirates of Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah. Named due to their geographic location in the northern part of the UAE, these emirates have emerged as lucrative destinations for property investments, especially residential property. The growth of the real estate sector in the northern stretch promises to make an impressionable impact on the infrastructure development of the UAE’s real estate.Real estate growth in Northern Emirates Recently, a survey was conducted by DSL Exhibitions to gauge consumer concerns and satisfaction levels in the wake of the UAE property boom. According to the report, 42% believes that the next property boom of the UAE will take place in Abu Dhabi, while 31% said in Ajman and a surprising 3rd place was taken by Ras Al Khaimah at 19%. AVERAGE PRICE INDEX (for Northern Emirates in Jan '08) Our estimates show that the prices of studios in the Northern Emirates vary between US$602 per sqm (in Ajman) and US$1229 per sqm (in Sharjah). For 1 bedroom apartments, the figures average US$847 per sqm (the rates being highest for Ras Al Khaimah). The prices of 2 bedroom apartments are lowest in Ajman with prices averaging US$441 per sqm and highest in Ras Al Khaimah at US$1356 sqm. In the 3-bedroom category, Ajman again is the most attractive proposition with US$470 per sqm.
KEY DRIVERS OF REAL ESTATE GROWTH IN AJMAN AND NORTHERN EMIRATES I. High property prices coupled with rising rental costs make Dubai relatively less accessible to the middle income group. The real estate development in the Northern Emirates, on the other hand, targets middle-income buyers and investors. In terms of purchase power parity, one can buy a 2 bedroom apartment in the Northern Emirates for the price of a studio in Dubai. II. Distance and commuting time between the Northern Emirates and Dubai is a prime factor encouraging families to shift their base from Dubai to Sharjah or Ajman in particular, and even Umm Al Quwain and Ras Al Khaimah. With the Autobahn Emirates, Sharjah and Ajman are a mere 15-20 minutes from Dubai. III. Escrow Account Law implemented by Dubai in late 2007 has made rules more stringent in the emirate, thereby reducing the number of new launches in recent times. This, in turn has been a blessing in disguise for developers in Ras Al Khaimah, Umm Al Quwain and Ajman where the law is yet to be drafted. REALTY PROJECTS UNDERWAY IN NORTHERN EMIRATES
Infrastructure development Ajman, Umm Al Quwain and Ras Al Khaimah will spend $15 billion to increase power and water supplies over the next decade to boost current installed capacity of 1,200 megawatts to 2,000 megawatts by 2018. There will be an increase in population of the Northern Emirates in the coming years with billions of dirhams worth of projects announced. 
More real estate laws in the pipelineThe Government of Ajman has set up a special department – Ajman Development and Investment Authority - to regulate real estate development activities in the emirate. The newly formed agency will study and prepare freehold laws, escrow account law and strata regulations similar to the ones implemented in Dubai. Also, it will deal handle disputes such as those related to finance and contractual obligations. Do look up this space next week as we discuss the availability and current price structure of offices in Dubai. Keep reading! Disclaimer: Gowealthy.com does not guarantee accuracy of projections and numericals. Gowealthy.com is not liable of loss due to its negligence. Our suggestions and articles do not constitute to recommendations. The decisions to be made are at the own risk of the reader. |
