ChatGPT has taken the world by storm and quickly became a global success. The latest addition to the GPT series of massive language models, ChatGPT from OpenAI, has generated a lot of excitement. As technology advances, it’s not only e-commerce that is embracing the use of chatbots and artificial intelligence (AI). This revolutionary app is transforming every industry. 

Real Estate developers, management companies, and owners are starting to see the benefits of ChatGPT and are beginning to implement it into their business operations. ChatGPT has come as a blessing for the real estate sector. Since its launch in November 2022, this app has played a pivotal role in improving the operational efficiency of every process such as – resident service, data analysis, document creation, and decision-making. This has resulted in improvements in buyer/resident satisfaction, faster sales of the units, improved occupancy rate, and more revenues for the developers.  

What is ChatGPT?

Launched on 30 November 2022, ChatGPT is an artificial intelligence Chatbot developed by OpenAI – (a renowned artificial intelligence research laboratory). ChatGPT is a Natural Language Processing (NLP) tool driven by AI technology. It generates natural and fluent text based on given prompts, making it a versatile tool to accomplish most of the administrative and business development tasks for the real estate sector. 

Within just 6 months of its launch, ChatGPT has shown great potential. According to the latest article by Polymer Search, as of April 2023, ChatGPT is used by over 100 million people worldwide. It gained over a million users within a week of its launch and has processed around 300 billion words on approximately 175 billion parameters. ChatGPT receives around 10 million daily queries and is forecasted to earn revenue of USD 200 million in 2023 and about USD 1 billion by the end of 2024. Realizing the massive potential of ChatGPT, technology giants are investing significantly in its developer, OpenAI. Recently, Microsoft Corp. invested USD 10 billion in OpenAI to get access to some of the most popular and advanced artificial intelligence systems.

Implementation of ChatGPT in Real estate Operations

ChatGPT is touching the lives of every real estate stakeholder. With the use of ChatGPT, Property management firms are automating their customer service processes. They are deploying ChatGPT to answer common questions, provide property information, and even schedule property viewings. This allows them to devote time to more strategic tasks like reducing operational costs, creating community guidelines, designing plans to boost community engagement and resident satisfaction, focusing on Environmental, Social, and Governance (ESG), Sustainability, negotiating contracts and effective management of property portfolios. Management companies are also leveraging ChatGPT to streamline their operations and offer more personalized experiences to clients. 

As the adoption of AI continues to grow in the real estate industry, it’s likely that ChatGPT and other AI-powered tools will become even more integral in managing a diverse range of its operations such as – customer service, marketing, content creation, and data analysis. Today, more and more real estate developers are adopting ChatGPT and we can expect to see even greater impacts on the workplace in the future. ChatGPT has already outsized the impact on real estate and the extent of its potential application still remains unmapped.

AI technology is indeed enabling the real estate sector to prepare comprehensive industry reports and empowering decision-makers to analyze complex data quickly. With the assistance of AI, real estate professionals can gather and process vast amounts of data related to property performance, market trends, and buyers’ preferences. This enables them to make informed strategic decisions and stay ahead in a competitive market.

Additionally, AI-powered chatbots like ChatGPT are assisting real estate professionals in content creation and marketing efforts to reach a wider range audience and engage effectively with potential buyers and sellers. ChatGPT provides personalized recommendations; answers common questions, and offers 24/7 support to enhance the overall customer experience and increase customer satisfaction.

Top 10 Ways ChatGPT is Positively Impacting the Real Estate Sector

ChatGPT is viewed as the most powerful tool in improving the efficiency of the real estate industry. It has assisted the sector in automating most of the operational tasks to provide faster responses to resident queries with ease and 100% accuracy. 

Here are the Top 10 Ways ChatGPT is Positively Impacting the Real Estate Sector –

1. Simplifying the Communication Process with the Stakeholders

ChatGPT is being used by real estate professionals to provide round-the-clock customer services to the residents, real estate agents and representatives. It assists real estate developers and management companies in explaining rental or purchase processes and providing general guidance to potential buyers. 

ChatGPT is being programmed to answer all the queries and Frequently Asked Questions (FAQs) of the residents related to billing, service, sales, financing, leasing, buying or selling a property, documents required documents, and complaints to name a few. ChatGPT has proved to be a valuable tool in enhancing customer support by enabling the real estate sector to provide prompt responses to their customer’s queries. 

2. Lead Generation and Business Development

ChatGPT emerges as a powerful catalyst, propelling the real estate industry forward by facilitating expedited access to critical information for stakeholders. Seamlessly integrated into real estate websites and applications, this advanced AI technology empowers potential buyers and sellers to effortlessly acquire instant details about properties, ranging from essential elements like pricing, location, and features, all without the requirement of human intervention. The inherent ability to provide prompt responses to customer inquiries not only piques the interest of prospective property buyers but also fosters their inclination to revisit the platform. By introducing an unparalleled level of convenience, speed, and efficiency to the process, ChatGPT’s invaluable assistance not only drives customer engagement but also cultivates an environment conducive to heightened lead generation, sales conversions and business development which fuels the company’s growth & expansion.

3. Making Interactions with Residents More Personalized

Artificial Intelligence (AI)-powered chatbots like ChatGPT have the ability to generate unique patterns based on client behavior. Furthermore, when trained on individual interactions and preferences, ChatGPT can provide personalized and tailored outcomes. Research indicates that leveraging AI in the form of chatbots has emerged as an effective solution for real estate businesses, as it provides a swift and more personalized response to customers. This smart utilization of AI-powered chatbots not only enhances operational efficiency but also has a profound impact on customer satisfaction.

4. Overcoming Language Barriers

The UAE is home to more than 200 nationalities with native Emiratis only accounting for 10% of the overall population. This unique demographic composition also creates language challenges as not everyone knows Arabic or English. 

As a language model, ChatGPT is trained to perform various natural language processing tasks such as – language translation, summarization, question answering, text classification, and more. It is capable of translating the content into 95 languages. ChatGPT leverages deep learning techniques and large datasets to understand the context and generate relevant responses. The model has been trained on a vast amount of text data and can recognize patterns and relationships between words and phrases to generate coherent and contextually relevant responses. With its capabilities, ChatGPT is assisting the real estate sector in various tasks related to text and language processing to overcome language barriers.

5. Unconventional Analytics Capabilities to Facilitate Business Decisions

Property development projects require extensive research and maintenance, which can be time-consuming and expensive. ChatGPT’s analytical capabilities can also play a decisive role in assisting real estate developers in performing data analysis, gathering crucial insights on upcoming market trends and analyzing buyer behaviour & preferences. This will assist the real estate leaders in strategic decision-making. ChatGPT is also equipped with advanced analytics features to reduce the time and resources spent on potential developments. It can also analyze the sentiments of the text to determine whether it is positive, negative, or neutral.

6. Writing Business Proposals and Marketing Content 

ChatGPT is equipped with AI technology’s NLP component, which assists Business Development (BD) and Marketing teams in analyzing transaction-related business proposals for errors. It also enables them to transform documents into useful information which reduces the time spent on due diligence in real estate purchases. ChatGPT has made it much simpler for the BD teams to analyze enormous amounts of competitor and industry data involved in real estate business deals.

Real estate executives often struggle in creating engaging marketing content due to time constraints and writer’s block which often leads to missed business opportunities, lost leads and lower search engine rankings. The implementation of ChatGPT empowers them to generate highly customized, crisp and SEO-friendly marketing content within a few seconds. This not only boosts the lead generation process but also has a profound impact on the company’s brand image and reputation.  

7. Automating Administrative Tasks

Within a short span, ChatGPT has been instrumental in automating a vast majority of administrative tasks which used to consume a lot of man-hours.  ChatGPT can handle routine inquiries and tasks from both internal staff and external stakeholders. It can provide information about office hours, address common queries related to administrative processes, and direct individuals to the appropriate department or personnel. ChatGPT can also help in scheduling appointments, managing calendars, and sending reminders to ensure efficient coordination of meetings and events within the Administration department. It can also assist in rescheduling or cancelling appointments whenever necessary.

ChatGPT also allows the administration department to organize the documents, and retrieve, and the extraction of general information. It can assist in locating specific files, and offer guidance on document submission procedures. ChatGPT can help in training new administrative staff by providing information on standard operating procedures, company policies, and best practices. It can also serve as a resource for ongoing knowledge transfer and continuous learning within the department.

By leveraging ChatGPT’s capabilities, the Administration department in a real estate company can enhance efficiency, streamline communication, and improve overall productivity in various administrative tasks.

8. Generating Accurate Valuations for Properties

The implementation of ChatGPT algorithms allows research teams to generate accurate valuations for properties. ChatGPT has advanced capabilities to analyze vast amounts of data to quickly provide comprehensive insights and predictions. This assists real estate professionals in accurately analyzing property values and upcoming market trends. The implementation of ChatGPT can improve the overall accuracy and efficiency of the real estate industry and lead to better outcomes for buyers, sellers, and investors.

9. Improved Residence Experience

ChatGPT can retrieve vast quantities of diverse information and solutions much faster than manual methods. This assists real estate industry leaders in swiftly analyzing the performance and taking timely actions to meet the resident’s expectations and foster efficiency in the process.

10. Estimating ROI on the Property to Make Informed Investment Decisions

ChatGPT has proven to be instrumental in assisting real estate investors in estimating potential returns (ROI) associated with real estate investments. It also serves as a resourceful assistant in helping users calculate the anticipated financial outcomes of property ventures. Moreover, users frequently rely on ChatGPT to generate comprehensive tables and charts that illustrate long-term investment scenarios. By inputting various variables such as property price, rental income, expenses, and market trends, users can obtain a clearer picture of how different factors might influence their investments over time. This way ChatGPT is empowering real estate investors to make informed investment decisions.

The last half-decade has witnessed a colossal rise in Cybercrimes across the globe. Right from a Fortune 500 organization to a small-scale business to a consumer, everyone has faced the brunt of cybercrime in some way or another. This has not only cost the companies a fortune in terms of financial losses but has also put their brand value and reputation in jeopardy.  

As per the latest studies conducted by Cybersecurity Ventures, Cybercrimes are predicted to cost the world US $8 trillion in 2023. If it were measured as a country, then cybercrime would be the world’s third-largest economy after the U.S. and China.  The studies also predict that global cybercrime costs to grow by 15% per year over the next five years, reaching $10.5 trillion USD annually by 2025, up from US $3 trillion in 2015. 

Common Cyber Crimes Residents Must be Beware of 

The realm of cybercrime encompasses tactics such as phishing, business email compromise, and other cyber-attacks wherein criminals adopt disguises to access sensitive information. This digital extension of traditional crime targets personal financial data, often involving high levels of sophistication by individual or organized cyber criminals. Techniques employed are varied; some operate phishing scams to cast wide nets, relying on volume, while others focus on high-net-worth individuals, investing substantial time in profiling targets based on public and private data. This entails using hacked credit information, property records, and social media details to orchestrate asset theft. 

A recurring pattern involves sending deceptive emails containing links or attachments that, when engaged, infect the victim’s computer with malware. This malware can be exploited to pilfer login credentials or control the victim’s computer remotely, allowing unauthorized entry to financial accounts for profile changes or fund transfers.

How Can Residents Mitigate the Cybercrime Risk?

Cybercrimes have witnessed a substantial increase across the built environment in the last decade. They have adversely impacted the lives of every real estate stakeholder. Thus, it is pivotal to remember these 8 points to avoid falling prey to cybercrimes.

1. Use a VPN with a Strong encryption password

Starting with a robust encryption password and a virtual private network (VPN) is crucial for online security. A VPN encrypts your device’s traffic and safeguards it from cybercriminals. Even if they breach your connection, only encrypted data would be intercepted. It is always advisable to use a VPN on public Wi-Fi networks to ensure protection while browsing.

Your online security is paramount. We recommend never sharing your passwords as Kaizen AMS will never request this sensitive information. Always check the sender’s email address, which should only come from kaizenams.com. If you receive emails about new accounts or bank details, contact 800-KAIZEN or community@kaizenams.com for verification. It is pivotal to stay vigilant and protect your personal information.

2. Allocate a Dedicated Device for Financial Transactions

To prevent any cybercrime related to financial transactions, residents must assign a dedicated device solely for the purpose of financial transactions (i.e., rent payments, service charges, payment of DEWA bills, and other invoices) to minimize the exposure to malware and breaches.

3. Avoid Phishing

The report by Deloitte reveals that 91% of all attacks begin with a phishing email to an unsuspecting victim. On top of that, 32% of all successful breaches involve the use of phishing techniques. Residents must refrain from accessing financial or e-commerce sites through email links. Instead, they must use saved links and confirm secure connections starting with https. to verify the requests for money transfers by phone.

4. Social Engineering 

It is of paramount importance to secure personal and private information, as cybercriminals can trace data points through social engineering. Residents must limit sharing private and confidential information like their mother’s maiden name or pet name on social media as this could expose answers to common security questions. 

Social threats contributed to almost a third of confirmed data breaches, primarily through phishing (92% of social-related attacks). Attackers use deceptive emails with malicious attachments or links to access sensitive data, like banking credentials and trade secrets. Vigilance is key to preventing such breaches and safeguarding critical information from spear phishing and related tactics.

5. Installing Security Software on Smartphones

With the proliferation of sensitive data stored on mobile devices and the growing trend of using them for tasks like online banking, the occurrence of new mobile malware variants has surged exponentially in the last few years. However, users continue to overlook safeguarding their devices against these threats. It is crucial to equip mobile devices with security software offered by reputable providers, regularly updating this software. This proactive approach is imperative to counter the rising risk of mobile malware and ensure the protection of sensitive activities conducted on these devices, such as – online banking.

6. Create Distinctive User IDs and Activate 2FA

Residents must create distinct user IDs, and passwords, and activate two-factor authentication (2FA) uniquely for each online portal they access to add a layer of protection against potential breaches. This multi-tiered strategy will significantly bolster the defence mechanisms against various forms of cyberattacks. This additional security layer also enhances the level of safeguarding, elevating the overall security posture and deterring unauthorized access.

7. Regularly Updating the Systems

Residents must regularly update the devices and software to evaluate and address any vulnerabilities. They must set up regular updates and download legit antivirus software. Furthermore, residents must back up data frequently to thwart ransomware attacks.

8. Avoid Using Public Wi-Fi

Residents should establish secure home Wi-Fi networks and must steer clear of public Wi-Fi networks due to potential vulnerabilities. Public Wi-Fi networks often lack encryption and can expose your data to malicious actors. When travelling, it is prudent to opt for a paid hotspot provider to maintain secure access. By implementing robust security measures for your home network, residents can create a shield against unauthorized access and potential breaches. Public Wi-Fi networks often lack encryption and can expose your data to malicious actors.

In the last four years, Dubai’s property market has experienced remarkable growth which was greatly influenced by the implementation of the Golden Visa. In 2019, the UAE government introduced the Golden Visa Programme, a long-term visa system aimed at attracting foreign residents to contribute to the country’s economy and society. By offering an extended and flexible visa option, the UAE aims to attract individuals who can bring expertise, investment, and talent to the nation, fostering growth and development in various sectors. 

The Golden visa has come as a ‘blessing in disguise’ for those who were in search of a better future abroad. Many perceive that the Golden visa has come as a ray of hope for global investors and working professionals in light of several developed nations like the US, UK and the EU phasing out or tightening their residency and work visa programs.

Golden visa has simplified the process for investors and residents to acquire long-term residency through property investments. Consequently, there has been a significant increase in the demand for Golden Visas. 

What Makes ‘Golden Visa’ Unique?

The ‘Golden Visa’ is a highly sought-after long-term residence visa that offers a range of exclusive benefits to foreign talents looking to live, work, or study in the United Arab Emirates. 

1. No Need for Sponsorship

One of the key advantages of the Golden visa is that it eliminates the need for a sponsor, providing individuals with greater independence and flexibility in their professional pursuits. Golden Visa holders can sponsor family members, including parents, spouses and children of all ages. Additionally, there is no limit on the number of domestic helpers that can be sponsored, further facilitating a comfortable and convenient lifestyle.

3. Privilege of Staying Outside the UAE for Extended Periods

Golden visa holders are granted the privilege of staying outside the UAE for extended periods, exceeding the usual six-month limit, without jeopardizing the validity of their residence visa. This is particularly advantageous for international individuals who may need to travel frequently for work or personal reasons.

Criteria for Real Estate Investors

According to the UAE government website, if an investor owns one or multiple properties, he/she can be eligible for a 5-year Golden Visa, which is renewable under the same conditions and without a sponsor. 

The requirements for this type of visa include:

• Provide a letter from the Land Department of the relevant emirate confirming ownership of one or more properties with a total value of at least AED 2 Million.
• Alternatively, purchasing a property with a loan from specific local banks that have been approved by the competent local entity.

The UAE has recently reduced the minimum property investment required to qualify for the Golden Visa. The new regulations no longer specify the type of property transactions eligible for the visa, whether they are off-plan, ready, purchased with a mortgage, or paid in cash. 

Process

The process to apply for a Golden visa is very simple. All the real estate investors need to do is follow the four steps below:

Step 1: Visit one of DLD’s Service Centres

Step 2: Submit the necessary documents and pay the applicable fees

Step 3: Undergo a medical examination at the designated centre. 

Step 4: Have the Golden Visa stamped on your passport

Documents Required to File for Golden Visa

Required documents for the application include:

• Passport
• An electronic copy of the title deed certificate
• Passport-size photo
• Valid health insurance
• Original Emirates ID

By providing these documents and following the application process, real estate investors can apply for a Golden Visa through property investment.

The Impact of Golden Visa on the Real estate Sector

The launch of the Golden Visa has made Dubai’s real estate sector more attractive than ever for global investors and has substantially accelerated the demand to buy property in the city. This is very much evident from the colossal increase in the real estate transaction year-on-year. 

1. Exponential Rise in Real Estate Transactions Since 2019

Within a few months of its launch in 2019, Property sales transactions in Dubai hit an 11-year high, recording a growth of 20% compared to 2018. This positive trend continued in 2020, 2021, and 2022. Despite the global economic slowdown in 2020 due to COVID-19, Dubai’s real estate sector recorded 51,414 transactions representing a value of over AED 175 billion, according to the annual transaction report issued by the Dubai Land Department (DLD). The success story continued in 2021 as well with Dubai’s real estate market witnessing 84,772 real estate transactions valued at AED 300bn in 2021 – a 65% growth in the number of real estate transactions and a 71% increase in value compared to 2020. 

In the year 2022, Dubai’s real estate surpassed all its previous records and recorded real estate transactions worth AED 528 billion in 2022, which is the highest figure ever. This was a 76.5% increase from 2021 according to the Government of Dubai Media Office. These figures reflect the positive impact of the Golden Visa program on property sales and its role in amplifying the performance of Dubai’s real estate sector.

2. Increased Demand for Holiday Homes and Short-term Rentals

Dubai’s Golden Visa program has not only created a staggering demand for Residential and Commercial real estate but also for holiday homes and short-term rentals. There has been an influx of visitors staying in Dubai on a short and mid-term basis which is generating substantial revenues for the real estate sector. Golden visa has also accelerated the demand for ‘second-home’ admirers.  Freelancers, remote workers, and entrepreneurs always prefer a “home away from home” experience which makes short-term rentals their preferred choice. Short-term rentals offer flexibility and stability, with fully furnished accommodations and amenities that enable digital nomads to maintain their preferred lifestyle while working remotely. 

3. Incentivise the Tenants to Buy the Property

The length of the residency period in Golden Visa also incentivizes real estate tenants to consider buying a property instead of continuing to rent. Over a period of several years, the cumulative rent payments can approach the cost of purchasing the property itself. This makes owning the unit a more financially attractive option, especially considering that real estate is often seen as a good long-term investment. Furthermore, the option of obtaining a dedicated loan from specific UAE banks for purchasing a property simplifies and expedites the buying process. This can be advantageous for investors who may not have the full amount required for an outright purchase but still want to take advantage of the benefits associated with property ownership and the Golden Visa.

‘Rent-to-own-units’ offerings are gaining ground in Dubai like never before. However, there is still a lot of confusion surrounding this concept. Developers often come up with rent-to-own options when the supply of the property exceeds its demand. They want to use rent-to-own as a second option to sell the property in order to move the stock, which is more common in projects located far from the city.

What is ‘Rent-to-Own Units’?

In simple terms, rent-to-own properties involve the buyer purchasing the property from a developer by paying on a monthly, quarterly, or annual basis, as specified in the agreement. 

Rent-to-own Unit is a property arrangement which enables individuals to lease a unit for a specific time with the option to buy it later, where the rental payments act as a down payment. The agreement is made between the buyer and developer, operating under tenancy laws in the UAE. This option appeals to aspiring homeowners in the UAE. The developer and buyer must agree on the ownership timeline, which can extend up to 20 years, and the rental amount during this period. The upfront payment is typically around 5% or less, eliminating the need for a mortgage with a 25% down payment. Though rent may be higher than market rates, it offers convenience for buyers struggling to save for a deposit.

Rent-to-own unit agreements are completely legal. Dubai Land Department (DLD) has launched a rent-to-own service through its portal, which is the registration of a specific title of deed to provide a clear legal framework to facilitate such transactions. DLD has issued guidelines and fees related to registration, financing, transfer, and cancellation of rent-to-own contracts. While there are established guidelines, it’s worth noting that the rent-to-own schemes in practice have been individually developed to suit each specific case.

‘Rent-to-Own Units’ – A Faster Way to Become a Homeowner 

There has been a change in consumer buying behaviour towards ‘Rent-to-own’ units in the last few years The ‘2022 Annual Market Watch Report’ by Property Finder finds out that consumer buying behaviours have been rapidly evolving towards more long-term investments, with tenants preferring ownership over rental properties which is majorly driven by the surge in average market value by 25%.

Agreements Available in ‘Rent-to-own units’ 

The two available agreements in ‘Rent-to-own units’ includes – a.) Possibility to Purchase  b.) Purchase Agreement.

a.) Possibility to Purchase: In this arrangement, the buyer pays an ‘option fee,’ a mutually agreed percentage of the purchase price, securing the right to purchase the property in the future. If the purchase isn’t pursued, the option fee is forfeited. This approach allows for careful consideration of property ownership before committing, acknowledging its significance.

b.) Purchase Agreement: All terms are mutually agreed previously with the buyer and developer deciding on a fixed purchase price or choosing to determine the price with a future valuation at an agreed date.

Which Type of Properties is Popular in ‘Rent-to-own’ Option?

Some of the most popular properties in rent-to-own arrangements are single-family homes or townhouses. Buyers are typically looking for properties that they can eventually own and that meet their long-term housing needs.

Several buyers have also shown interest in rent-to-own options for larger, more expensive properties such as – multi-family homes or even commercial properties. However, these types of arrangements may be less common, and the eligibility requirements may be more stringent.

Buyers who are interested in rent-to-own options are typically looking for properties that meet their current and future housing needs and that they can eventually own. Mostly, buyers who are opting for the ‘Rent-to-own’ Option are from India, Russia, Pakistan, and the Middle East.

Developers offering ‘Rent-to-own units’ Option

Some of the major developers offering the ‘Rent-to-own units’ option include –

• Dubai South Properties offers Rent to Own for 2- & 3-bedroom apartments in the Pulse community with a flexible payment plan over 10 years. The offer includes 2 months of free rent. The tenant can rent and own the property after 10 years.

• California Village offers a ready-to-move-in and post-handover payment plan that can go for 5 years and a few other options.

Key Factors Influencing ‘Rent-to-own Units’ Option

The rent-to-own trend in real estate is influenced by various factors that can lead to its rise or fall. Economic conditions, such as job growth and unemployment rates, play a significant role. In a stable economy with a strong job market, more people can afford rent-to-own options, leading to a rise in the trend. Conversely, during an economic downturn with high unemployment rates, fewer people can afford this option, causing a decline in the trend. 

The availability and affordability of housing also impact the trend. A shortage of affordable housing or rising home prices may increase demand for rent-to-own, while an oversaturated market or falling home prices may decrease it. 

Interest rates also affect the attractiveness of rent-to-own options, with low rates potentially reducing the trend and high rates increasing it. Additionally, demographics play a role, with a large population of millennials struggling to save for a down payment leading to a rise in the trend, while a population of older homeowners may decrease demand for rent-to-own options.

Is ‘Rent-to-own units’ a Right Option for you?

Purchasing a property on a mortgage from a bank provides long-term stability and ownership but requires a larger down payment, a strong credit history, and a steady income. 

The main differences between renting-to-own schemes and home mortgages in Dubai lie in the down payment amount and eligibility conditions. For home mortgages, a minimum 25% upfront payment of the property value is required. In contrast, rent-to-own programs offer more flexibility, allowing you to try the unit before purchase and have simpler criteria and procedures. Rent-to-own schemes also increase the chances of owning a home in Dubai at reasonable prices, as the first payment is not as costly, and rental payments serve as a form of instalment to collect your capital indirectly.

Things to Remember Before Renting-to-Own Unit

When considering a renting-to-own scheme, it’s important to keep in mind the following points:

• Thoroughly understand all the clauses, rules, and conditions in the tenancy contract before signing
• Be aware of price differences based on market changes during the contract period
• Ensure you have the title of the deed throughout the entire contract duration
• Understand the time frame for payment and termination clauses otherwise, you might end up paying a higher upfront amount compared to the going rate for similar properties not under a rent-to-own scheme.
• If you decide to buy the property, check your eligibility for a mortgage to complete the buying process.

Documentation required

• The value of the property that the buyer and developer agreed on
• The time frame of the lease contract, according to both parties’ confirmation
• The title of deed ownership throughout the contract duration
• Exit terms
• Penalty clause for defaulted repayments
• Percentage of down payment (if any) to be refunded in case you decide to terminate the contract 
• A clause related to sudden job loss, missed repayments, or mortgage rejection at the time of purchase (once the lease term ends)
• Property maintenance terms to define who is responsible for the upkeep of the property throughout the contract duration

To register for the rent-to-own scheme in Dubai, the following documents are required –

Individuals: a copy of the buying contract, a copy of the Emirates ID. For non-residents, a copy of a valid passport.

For Sole Establishments: a copy of the trade license. For the license’s owner, a copy of a valid Emirates ID and passport. Power of attorney if available.

For Limited Liability Companies: Copy of a valid trade license. For the license’s owner, a copy of a valid Emirates ID and passport. Power of attorney if available.Copy of the company’s Memorandum of Association ( MOA) and its appendices (legally translated into Arabic) and a copy of the shareholder certificate.

For Foreign/GCC Companies: a Copy of a valid trade license. For the license’s owner, a copy of a valid Emirates ID and passport. Power of attorney if available. Copy of the company’s Memorandum of Association and its appendices (legally translated into Arabic) and authenticated by the Ministry of Foreign Affairs. A copy of the shareholder certificate. No Objection Certificate from the Free Zone areas, with one-year validity (for foreign companies).

Final words

Undoubtedly, the ‘Rent-to-Own Units’ option has come as a ‘blessing in disguise’ for those buyers who are unable to secure a traditional mortgage due to factors such as poor credit, lack of down payment, or a high debt-to-income ratio. It is a suitable option for those buyers who want to become homeowners but may not have the financial means to do so immediately. Furthermore, rent-to-own options also involve lower upfront costs with more relaxed eligibility requirements.

However, it is also important to remember that the ‘Rent-to-Own Units’ option often comes with higher monthly payments and a premium for the purchase option yet it is much lower than the interest value. This makes rent-to-own a great option for those who can afford high instalment value.

Dubai’s real estate sector stands as a paragon of excellence, captivating global attention with its state-of-the-art, opulent, and awe-inspiring properties. This alluring combination has proven to be a magnet for investors worldwide, beckoning them to participate in Dubai’s real estate market and savour the bountiful rewards offered by its ultra-luxurious properties. Boasting an unmatched return on investment (ROI) of 7-8% makes Dubai’s real estate unparalleled in the global arena. Notably, the second quarter of 2023 witnessed a continuation of this remarkable trend, solidifying Dubai’s position as a beacon in the real estate realm.

Driving this unequalled performance are several key factors that have propelled the city’s property market to new heights, ensuring its constant evolution with groundbreaking developments. Foremost among these factors are the distinctive quality and innovative designs of the properties on offer, lower taxes for corporates, world-class infrastructure, highest return and rental value, and above all safety are some of the factors which are setting Dubai apart from any other city in the world. This uniqueness has undoubtedly contributed to attracting investors seeking premium offerings and superior returns.

Real estate transaction in Q2, 2023

Q2, 2023 has been the most successful Second quarter in the last 10 years in terms of both the number and value of the transactions. According to DXB Interact, in Q2, 2023, a total of 30,264 sales transactions worth AED 91.2 billion (US $24.8 bn) were recorded. The number of transactions in Q2, 2023 increased by a whopping 34.8% compared to Q2, 2022, however, compared to the previous quarter (Q1, 2023), the number of transactions decreased by 2.1%. 

In terms of sales value, there is a 2.8% increase in Q2, 2023 compared to the previous quarter and a colossal 54.4% increase in Q2, 2022. 

Out of 30,264 sales transactions – 23,244 apartments were worth AED 47.5 billion, 4,808 villas worth AED 20.9 billion, 925 commercials worth AED 1.6 billion, and 1,287 plots worth AED 21.2 billion.

Compared to Q1, 2023, there was a 1.4% increase in the number of apartments while Villa’s sales plummeted by 19.9% in Q2, 2023. The number of Commercial properties increased by 4% and the number of plots sold also surged by 18.7%.

When compared to Q2, 2022, there was a 54.1% increase in the number of apartments sold while the number of villas sold decreased by 12%. The number of Commercial properties surged by 30.6% and Plots by 8.2%.

Decline in Off-plan Property Sales Transactions

According to DXB Interact, the number of property sales transactions in Q2, 2023 stood at 15,889 worth AED 40.8 billion. This was a 10.4% decline from the previous quarter but a 44.2% increase from Q2 2022. 13,023 apartments were sold worth AED 30.2 billion. This was a 74.7% increase in the sales of apartments compared to Q1, 2022 but a 3.9% decrease from Q1, 2023. 

Sales of villas in Q2, 2023 were 2,739 worth AED 10.2 billion. This was a 22.2% decrease compared to Q2, 2022 and a 33.5% decrease from Q1, 2023. 127 Commercial properties were sold worth AED 369.5 million in Q2, 2023. This was a 209.8% increase compared to Q2, 2022 and an 81.4% increase compared to Q1, 2023. 

Surge in Ready Property Sale Transactions

According to DXB Interact, there were 14,375 ready property sale transactions took place in Q2, 2023 worth AED 50.4 billion. This was a 9.2% increase from the previous quarter and a 25.7% increase from Q2, 2022. 

The number of ready apartments sold in Q2, 2023 was 10,221 worth AED 17.3 billion. This was a 9% increase from Q1, 2023 and a 33.9% increase compared to Q2, 2022. Sales of villas in Q2, 2023 were 2,069 worth AED 10.7 billion – a 9.8% increase from the previous quarter and a 6.4% increase compared to Q2, 2022. 

798 Commercial properties were sold worth AED 1.3 billion in Q2, 2023. This was a 2.6% decrease from the previous quarter however, an impressive 19.6% increase compared to Q2, 2022. The sales of plots in Q2, 2023 was AED 21.2 billion – an increase of 18.7% compared to the previous quarter and 8.2% compared to Q2, 2022.

Off-plan vs. Ready Property Sales 

Going by Sales volume, 45% of the real estate transactions that took place in Q2, 2023 were for ready properties, while 55% are for off-plan properties. 

In terms of Sales value, 42% of the transactions are for ready properties and 58% for the off-plan.

Surge in Mortgage Transaction

A total number of  8,009 Mortgage transactions worth AED 32.8 billion happened in Q2, 2023. Compared to Q2, 2022, there was a 38.1% increase in the number of transactions and a 29.2% increase in total value.

Property Prices Witnessed an Upward Trend

Property prices also witnessed a rise in the second quarter of 2023. According to DXB Interact, the median price for the property increased from AED 1,150 per sq. ft. in Q2, 2022 to AED 1,336 in Q2, 2023. This was a 16.2% year-on-year (YoY) increase in property prices. When compared to Q2, 2014, the property prices in Q2, 2023 increased by 29.1%.

The price per sq. ft. for an Off-plan apartment in Q2, 2023 stood at AED 1,810 while the prices for an Off-plan villa were AED 1,207 per sq. ft.  For the Plot, the price per sq. ft. was AED 615. The price per sq. ft. for the Ready apartment was AED 1,140 while the price per sq. ft. for the Ready villa was AED 978.

Demand for Luxury Properties Remains Resilient

Q2, 2023 was one of the best quarters for the sales of luxury properties. 62% of the total properties sold in the second quarter of 2023 were above AED 1 million.

• 38% of the properties sold were the priced below AED 1 million
• 28% of the properties sold were in the price range of AED 1 million-2 million
• 14% of the properties sold were in the price range of AED 2 million-3 million
• 12% of the properties sold were in the price range of AED 3 million-5 million
• 8% of the properties sold were above the price of AED 5 million

This sales value proportion does not include mortgage transactions.

Most Expensive Properties Sold in Q2, 2023

Villas: The most expensive villas sold in Q2, 2023 were at Emirate Living (AED 150 M), MBR District 1 (AED 90 M), Dubai Hills (AED 82M), Palm Jumeriah (AED 76M), and The World (AED 74M)

Apartments: The top 5 projects with the most expensive apartments sold were – Bulgari Lighthouse Dubai at Island 2 (AED 137 M), BV Residences 3 at Jumeira Bay (AED 122 M), Six Senses Residences The Palm at Palm Jumeriah (AED 105 M), Bluewaters Residences 7 at Dubai Marina (AED 80 M) and Private Residences Dubai at Dubai Water Canal (AED 78 M).

Most Expensive Areas 

According to DXB Interact, the top 5 most expensive areas to buy an Apartment by per sq. ft. in Q2, 2023 were – Dubai Marina (AED 3,565 AED per sq. ft), Palm Jumeirah (AED 2,729 per sq. ft.), Downtown Dubai (AED 2,361 per sq. ft), Dubai Creek Harbour (AED 2,059 per sq. ft.), and Dubai Hills (AED 1,983 per sq. ft).

The top 5 most expensive areas to buy a Villa by per sq. ft. in Q2, 2023 were – Tilal Al Ghaf (AED 1,496 per sq. ft), Arabian Ranches 3 (AED 1,429 per sq. ft.), Damac Lagoons (AED 1,328 per sq. ft.), Damac Hills (AED 1,219 per sq. ft.), and Mudon (AED 1,125 per sq. ft.)

Digital transformation is the catalyst for building resilience and improving the efficiency of the real estate industry.

Author – Mr. Fadi Nwilati, CEO – Kaizen AMS

The real estate industry has grown at an exponential pace in the last two decades and become a key contributor to the UAE economy.

Sustainable construction practices are of great importance to the UAE as the region derives a vast proportion of its GDP from the built environment. Dubai accounts for the highest GDP from real estate among all seven emirates. According to the 2021 annual report released by the Dubai Land Department titled ‘Dubai Real Estate Sector Performance,’ the sector’s contribution has reached up to 14%. Real estate is empowering the UAE economy to reduce its reliance on oil and diversify into more sustainable sources of revenue. However, this monumental success of Dubai has come at a hefty price. Real estate is a major contributor to carbon emissions and energy usage. The story remains similar across the globe.

According to the World Economic Forum report titled, ‘Environmental Sustainability Principles for the Real Estate Industry,’ the real estate sector generates 20% of global greenhouse gas emissions and consumes more than 40% of global energy each year. The built environment consumes over 40% of the world’s raw materials.

Embracing sustainable practices

The role of technology will be pivotal in exploring innovative and sustainable ways to minimise the adverse impact of the sector on the environment.

Integrating sustainability and climate considerations into the real estate sector will lead to major short and long-term economic and financial payoffs. Technology has enabled the real estate sector in building resilience and maintaining business continuity. Digital technologies are enabling transformation and greater efficiency in real estate.

Here is a look at the major technologies which will play a decisive role in leading the UAE real estate towards net zero.

1. Internet of Things (IoT)

Emerging technologies such as IoT and AI will encourage the culture of sustainable construction in the UAE real estate sector. The article titled, How IoT Can Make Buildings Efficient & Sustainable’ by smart technology firm – Metrikus reveals that the implementation of IoT makes buildings responsive, and intelligent, bolsters their performance, reduces defects, monitors performance, and makes timely adjustments based on the dynamic environmental conditions. In this way, IoT improves the building’s efficiency and reduces its energy consumption to make it more sustainable.

2. Big data

Like any other industry, the real estate sector also goes through ineffective usage and storage of data. A vast majority of data lies in silos due to the involvement of multiple systems and stakeholders. Lack of data impedes the ability of real estate leaders in executing their sustainability goals and strategies effectively. Big data assists developers in evaluating bulky data and uncovering behaviour patterns and upcoming trends in sustainability or in real estate.

Big data allows firms to track the use of sensor inputs from the machines and devices used on construction sites. This helps in bolstering their efforts to improve fuel efficiency and reduce construction costs and the adverse impact of business activities on the environment.

The article titled, ‘How Big Data Has Transformed the Dynamics of Real Estate Industry’ reveals that in real estate, 90% of the decisions are made based on data. The presentation of data determines the future of an organisation, which may offer a business lead or lead to the closure of the deal. Holiday homes and apartment rental firms such as  Airbnb are leveraging AI-enabled big data analytical tools to improve their customer engagements and create unique experiences for them.

The implementation of big data will enable organisations to harness their existing database and empower their C-suite executives in making key decisions to drive sustainability for the greater good of their business and the environment.

3. Smart sensors

The implementation of smart sensors in buildings can significantly minimise energy and water consumption and make the building more energy efficient. The output of installing smart sensors in office buildings is even more favourable. Global research reveals the instrumental role played by smart sensors in leading the real estate sector towards sustainability. For example –  A study conducted by the American Council for an Energy-Efficient Economy (ACEEE) titled, ‘Smart Buildings: A Deeper Dive into Market Segments’ found that the average office can save 18% on its annual whole-building energy consumption by installing smart sensor technology.

Intel’s building named PTK1 based in  Petah Tikva is fitted with more than 14,000 sensors and produces more than 100 terabytes of data per day. The studies suggest that the installation of Smart sensors has allowed PTK1 in becoming 40% more energy efficient and in consuming 75% less water compared to an average office building. IoT sensors enable management firms in knowing the current occupancy rate of the community by providing them with real-time data on the building.

This allows them to monitor the energy usage and level of emissions, helping to design strategies to optimise the building’s performance.

4. Robotics

Robotics has bolstered the culture of automation in the real estate industry.  Robotic automation solutions have empowered the real estate sector in addressing its top challenges such as environment-friendly housing, energy efficiency, talent shortage, robotic welding, and enhancing the quality of construction.

The launch of the UAE Sustainable Initiatives, UAE Energy Strategy 2050, UAE Vision 2050, and Clean Energy Strategy 2050 reflect the true commitment of the UAE government to make the built environment more sustainable and environment-friendly. Robotics can play a decisive role through its array of automated and digital solutions which developers can use to minimise waste, reduce cost, foster energy efficiency, and develop more sustainable and environment-friendly building designs and construction processes.

5. Sustainable building materials

The usage of sustainable building materials like bamboo, solar tiles, smart glass windows, solar panels and others will lead to the construction of more sustainable buildings. Sustainable building materials will also increase the lifespan of the buildings and make them more adaptable to climatic conditions. For instance, the usage of heat-reflective paints will minimise the buildings’ energy consumption by keeping them cool in the humid climate of the UAE. The installation of smart glass windows will adjust their transparency and will optimize their cooling capacity.

Researchers across the globe are testing self-healing concrete used for making safer buildings and infrastructure and countering the effects of natural disasters.

Conclusion

The world is leveraging the power of technology to drive sustainability in its built environment. The consistent usage of technology and sustainable practices helped Dubai reduce its carbon emissions by 21% in 2021. The city is expected to reduce carbon emissions by 30% by the end of 2030 under its ambitious ‘Dubai Carbon Abatement Strategy 2030.’ A lot of credit for this goes to the honourable UAE Government for launching numerous projects and programmes focusing on increasing the share of solar energy, improving the operational efficiency at factories and facilities, waste treatment, waste recycling in power and water production, industry, and ground transport.

The implementation of sustainable practices will further minimise carbon emissions and empower the UAE real estate sector in addressing the challenges of climate change and in aligning its goals and objectives in line with the UAE’s ‘Net-Zero by 2050 Strategic Initiative’.

How to achieve economies of scale and minimise overall operating costs

– By Alex Voytov, Chief Operating Officer (COO), Kaizen AMS

The operational costs of real estate continue to rise exponentially due to a surge in the cost of construction materials and labour, supply chain disruptions and mounting inflation. 

As the competition in Dubai’s real estate sector gets fiercer, developers are adopting innovative technologies to optimise costs. The implementation of digital technologies can automate 30-40% of real estate operations and significantly reduce costs. 

Here are the top ways to reduce operational costs in a residential community –

1. Leveraging motion sensors to reduce energy consumption

Motion sensors automatically turn off electronic devices such as lights and air conditioning when no one is present in the room. The implementation of these sensors curtails electricity costs and regulates air quality and carbon emissions. 

The article titled ‘Benefits of using motion-sensor light switches’ by The Eco Guide reveals that the implementation of motion sensors can reduce energy consumption by 35-45% and can go up to as high as 75%. By reducing energy consumption, motion sensors help reduce carbon emissions. 

Rising energy bills are increasing the operational costs of the building with lighting being the major contributor. The study titled – ‘Managing Energy Costs in Office Buildings’ reveals that lighting accounts for over 39% of the energy bill in the office building and shoots up the operational cost significantly. The usage of LED lighting can save approximately 70% of energy costs, as it lasts five times longer. Furthermore, installing LED lights with motion sensors in the corridors, car parking, and garbage chute rooms with relay switches in the staircases can significantly minimise the energy and operational cost in both residential and commercial buildings. 

2. Installing smart locks, access control and CCTVs to reduce security costs

 Smart locks and access control systems, can eliminate the need for traditional keys and simplify the process of granting access to authorised personnel. Digital surveillance systems can be used to monitor properties remotely and alert security personnel of any suspicious activity. Elevator control technologies can restrict access to certain floors or areas, improving security and preventing unauthorised access. ANPR (automatic number plate recognition) systems can be used to track and monitor vehicles entering and exiting a property, helping to identify potential security threats. These technologies will play a pivotal role in reducing the costs associated with hiring, training, and deploying security personnel, while also improving overall security and safety. 

3. Using BMS for better property management

A Building management system (BMS) helps in monitoring and managing the mechanical, electrical, and electromechanical services in a facility. Some of these services include power, HVAC physical access control, pumping stations, elevators, and lights.

Using BMS provides comprehensive visibility to the Property Managers (PMs) on the operational performance of the building and the areas responsible for the highest energy consumption. It empowers PMs in planning effectively and taking timely measures to reduce energy consumption and optimise building performance. 

4. Planned Preventive Maintenance

Preventive Property Maintenance (PPM) is the key to managing regular building inspections and repairs and ensuring that the building performs at its optimum level. It is aimed at preventing system failures and frequent repairs by analysing the problem well in advance and taking timely measures. 

PPM increases the lifespan of the building, minimises the risk of building damage, increases the efficiency of the building’s assets, reduces unplanned downtime, reduces the replacement of pump timeline from 5 to 10 years, and in overcoming unexpected stoppages and damages. PPM prevents developers from lawsuits and legal issues which might arise due to any injury caused to the residents as the building is not maintained properly. 

The article titled – ‘Preventive Maintenance and Its Top Benefits’ by Zenatix, a Hero Electronix venture, suggests that around 82% of companies have to go through unplanned downtime in assets resulting in unnecessary costs to erect it. This significantly shoots up their operational costs and invites potential lawsuits for the developer. 

Future Plans

In future, Dubai’s real estate sector will witness a substantial rise in the number of developers embracing technology to enhance the quality of their services and reduce operational costs. Continuous investment in novel technologies will enable developers in differentiating their services and in maintaining competitive or lower service charges for residents, making their community attractive.

In the coming years, we will witness real estate firms changing their approach to pricing models for service providers to reduce operational costs and offer competitive service charges to residents. The top priorities of Dubai’s real estate sector will be to achieve economies of scale in procurement and to implement best industry practices.

Here are the top ways to achieve economies of scale and minimise overall operational costs:

a.) Signing long-term contracts with service providers

In the near future, real estate developers and property management firms will be signing long-term or minimum three-year contracts with service providers to achieve economies of scale. Long-term contracts will make service providers more committed to serving the community and encourage them to invest their best resources, technicians, technology, machines, and front-line staff.

b.) Investing in regular training

Clearly define the Quality Level Standards and provide training to workers of Facility Management (FM) companies and other service providers on internal processes to enhance the quality of services and provide greater agility to operations. 

c.) Pricing model management

Firms will switch towards a resource service-based pricing model to drive efficiency, quality, and cost reduction. The lack of qualified, experienced, and trained workers is the biggest challenge for Property Management firms while dealing with maintenance companies. Soon, PM firms will prioritise hiring experienced, trained and professional staff to manage the community. This will bring down the operational costs of the community by 20-30% and improve the quality of services.

d.) Well-planned design and construction phase

The design and construction phase determines the operational costs and life of the building. It is important to focus not only on the GFA, but also on how these areas will be utilised, what exactly is required for the residents, and how the equipment servicing the building will operate in 5-10 years. As an example, energy-efficient chillers will reduce service charges for the unit owners significantly, proper design and installation of CCTV minimise the need of hiring additional security staff, and deploying Building Management Systems and Building Automation Software to provide timely updates to property managers on the building’s energy consumption and overall performance.

e.) Embracing energy-efficiency practices

Innovative technologies to control energy consumption include automating electronic appliances to reduce energy usage and minimise energy bills, implementing the controls and equipment to measure consumption through BTU meters, building management systems, and IoT sensors, focusing on improvements such as installing highly energy-efficient building systems including HVAC, lighting, and vertical transport. It is crucial to conduct timely audits to ensure all the devices are energy-efficient and operate effectively. This can be achieved by conducting a timely internal energy audit, performing regular maintenance and upgrades of the building equipment, managing occupant behavior, and ‘peak loads,’ and achieving ISO 50001 accreditation. 

f.) Hiring management companies for budgeting

Management companies can provide a different perspective and help developers optimise the operational costs of the building. These companies provide a detailed budget to ensure that the vision of the developers is met at optimal cost, without compromising residents’ expectations.

Alex is Chief Operating Officer at Kaizen Asset Management Services (Kaizen AMS). His career spans more than two decades in Project Management, Investment Management, Asset Management, Development, Compliance, Quality Management and Control.

Built Environment’s ‘Expert Talk’ series carries knowledge pieces every week by industry professionals who give their take on the key trends, observations, issues, and challenges in the built environment. The opinions in these articles are the author’s own and do not reflect that of the publication. This is a standard disclaimer.

The collection of service charge fees has been the most pressing issue faced by management companies. Lack of timely payment of service charge fees by the owners adversely impacts the capabilities of the management companies in performing their responsibilities to maintain the property and initiate the enhancement work for the welfare of the community as well as its residents. 

One of the primary reasons for the delays and deferrals in the collection of service charge fees is the lack of a clear mechanism for the payment of service fees among the owners. To overcome this challenge, in a historic move, the Real Estate Regulatory Authority or RERA has released Circular No. (3) 2021 which clearly outlines the mechanism for collecting service fees and procedures before heading to the Rental Dispute Resolution Center.

What are Service Fees or Charges? 

Service fees/charges are the recurring fees which homeowners pay for the maintenance and upkeep of the building, community, and common areas. It comprises all the fees towards cleaning, MEP services, waste collection and disposal, landscaping, gym equipment and swimming pool maintenance, security services, maintenance of CCTVs to ensure safety standards of the residents, and general upkeep of the building as well as the collection of the Reserve Fund for the future replacing of the assets and Master community fees. 

Average Service Charges in Dubai Real estate

According to the reports from Dubai Land Department (DLD), the service charges for a property in Dubai range between AED 3.00 to 30.00 per sq. ft. or sometimes even more, depending on the number of factors, including but not limited to the location of the building, size, and age of the building, type of the community (residential/commercial, villas or low-mid-high rise building) facilities available, cooling type (district cooling/chiller cooling) and many more. The report titled – ‘Service charges comparison for flats and villas in Dubai’ by Bayut states that the Service charges in Dubai are applicable to all types of properties. These recurring fees are charged on a square foot basis and can range anywhere between AED 3 and AED 30 or sometimes even more.

Responsibilities of the Developer and Management Company in the Collection of Service Fees

Here are the responsibilities of the developers and the management companies in the Collection of Service fees as outlined in Circular No. (3) 2021 –

a.) Responsibilities of the Developers

Documentation: The developer is obligated to deliver the documents related to the receipt and delivery of units to the buyers. These documents are considered records of the property, and service fees are calculated according to these documents.

b.) Responsibilities of the Management Company

Here are the key responsibilities of the management Company as per the Circular No. (3) 2021 –

1.) Invoicing and Usage charges to Owners: The management company is obligated to send invoices for service charges and usage charges to the owners of jointly owned properties on the specified dates without delay.

2.) Issuing Payment Notices to Owners in Case of Payment Failure: In case the owners of units fail to pay the fees due on them at the specified times, the management company has the right to issue payment notices so that the owners are given 30 days from the date of the notice to pay the amounts due from them.

3.) Accuracy of the Data: The management company shall be responsible for the accuracy of all data contained in the notification (the owner’s address, e-mail, financial statements, etc.).

4.) Delays in the Submission and Approval of the Budget: In case the management company delays in submitting the budget and approving it by the institution, it must pay the service fee amounts in installments to the owner and not be required to pay them in one payment.

5.) Non-compliance by the Owners in the Payment of Service & Usage Fee: In case of non-compliance by the owners to pay the due fees for services and usage fees, the management company has the right to register a case with the Rental Disputes Resolution Center.

6.) Prerequisites for the Management Company before registering the case with Rental Dispute Resolution Center:

The management company must, before registering the case with Rental Dispute Resolution Center, fulfill all the necessary steps and requirements. These requirements include –

a.) Verifying the validity of the amounts owed by the owners and their breach of payment

b.) Checking the amounts of fees due by one of the auditing offices approved by the institution in accordance with the scope of the audit and the approved fees from the institution and the attachment in this circular

c.) the auditor must clearly and accurately state the result of the audit and the amounts owed by the owners, with the stamp of the audit office in the report which must be attached to the case file.

The real estate sector in Dubai stands as an epitome of global recognition, boasting a collection of state-of-the-art, luxurious, stunning, and extravagant properties. This reputation serves as an irresistible magnet, drawing investors from every corner of the world to partake in Dubai’s real estate market and bask in the remarkable benefits it offers. With an unparalleled return on investment (ROI) of 7-8%, the highest in the world, Dubai continues to solidify its position as a highly lucrative destination for discerning investors seeking remarkable financial gains. 

The month of April 2023 witnessed yet another testament to the city’s thriving property market, as it achieved unprecedented milestones and embarked on a trajectory of continuous evolution, marked by the introduction of groundbreaking, one-of-a-kind developments. From visionary skyscrapers to breathtaking waterfront residences, Dubai showcases an extraordinary commitment to excellence, elevating the standards of luxury living to new heights. Moreover, the prevailing governmental policies and initiatives lend substantial support to the real estate market’s prosperity. 

Real estate transaction in April 2023

Dubai’s real estate sector has demonstrated its resilience and attractiveness which is evidenced by the remarkable figures recorded in April 2023. According to DXB Interact, in April 2023, the total volume of residential transactions increased by 16% compared to April 2022 to reach an impressive 8,050 transactions worth AED 26.4 billion.  

Apartments dominated with 6,175 sales worth AED 11.4 billion, followed by 1,315 villa sales worth AED 5.5 billion. Commercial transactions amounted to 254 sales worth AED 400.8 million, while plots accounted for 306 sales worth AED 9.1 billion. 

Going by total property sales value by category, Apartments held the largest share at 43%, indicating their popularity and demand in the market. Plots followed closely behind, accounting for 34% of the sales, showcasing the interest in land investments. Villas constituted 21% of the total property sales, reflecting their appeal to a specific segment of buyers seeking a luxurious living. Commercial properties represented a smaller portion, comprising only 2% of the total sales. These percentages highlight the varying preferences and investment choices of buyers in Dubai’s real estate market. These figures highlight the demand for urban living, luxurious villas, and investment opportunities. Dubai’s real estate market remains vibrant and attractive to both local and international investors.

In April 2023, the Dubai real estate market experienced a significant shift compared to April 2022. The number of apartments sold increased by an impressive 36.8%, reflecting a growing interest in urban living. However, the number of villas sold declined by 28.7%, indicating a shift in preferences among buyers.  Commercial property sales, on the other hand, surged by 11.4%, demonstrating the resilience of the business sector. In contrast, the number of plots sold decreased by 13.6%, suggesting a slight slowdown in land transactions. Overall, these trends highlight the enduring confidence and trust of investors and homeowners in Dubai’s property market.

Off-plan Property Sales Transactions Increased by 27%

According to DXB Interact, there was a 27% increase in Off-plan property transactions in April 2023 compared to the same month the previous year.  There were 4,251 Off-plan property transactions that took place in April 2023 worth AED 10.17 billion. This includes 3,477 apartments worth AED 6.8 billion, 749 villas worth AED 2.6 billion, and 25 Commercials worth AED 77.1 million.

The number of apartments sold in April 2023 increased by 67.3% compared to April 2022 while the number of Villas sold decreased by 40.3%. There was a 66.7% increase in the Commercial sold in April 2023 compared to the same month the previous year.

The prices for Off-plan apartments were AED 1.2 million in April 2023 which was a reduction of 3.7% compared to April 2022 while the prices for Off-plan villas in April 2023 were AED 2.4 million – an increase of 31.4% compared to April 2022. The prices for Commercials in April 2023 were AED 1.2 million – a reduction of 25.8% when compared to April 2022.

Surge in Ready Property Sale Transactions

According to DXB Interact, In April 2023, the Dubai real estate market witnessed a total of 3,799 ready property sale transactions, representing a 5.7% increase compared to the same month in the previous year. Among these transactions, 2,698 apartments were sold, amounting to a value of AED 4.6 billion. Additionally, 566 villas were sold, with a total worth of AED 2.9 billion. Commercial properties accounted for 229 sales, valued at AED 323.8 million, while 306 plots were sold for AED 9.1 billion. These figures highlight the continued growth and diverse investment opportunities within Dubai’s real estate sector.

In April 2023, the Dubai real estate market witnessed a noteworthy 10.7% increase in apartment sales compared to the same month in 2022. Conversely, villa sales experienced a 4.1% decrease. Commercial property sales, on the other hand, showed a positive trend with a 7.5% increase, while plot sales experienced a decline of 13.6% in April 2023 compared to April 2022. These figures reflect the dynamic nature of Dubai’s real estate market and the varying demand for different property types during this period.

Off-plan vs. Ready Property Sales 

Going by Sales volume, 55% of the transactions that took place in April 2023 were Off-plan while 45% were for ready properties.  In terms of Sales value, 55% of the transactions were off-plan, while 45% were for ready properties.

Rise in Mortgage Transaction

A total number of 2,421 Mortgage transactions worth AED 11.1 billion happened in April 2023. This was a notable increase of 32.8% in terms of the number of transactions and a 48.9% increase in total value when compared to April 2022. These figures reflect the growing confidence of buyers and investors in utilizing mortgage financing options to facilitate their real estate transactions. The increase in both the number and value of mortgage transactions showcase the continued strength and resilience of Dubai’s property market.

Property Prices Witnessed an Upward Trend

Property prices also witnessed a rise in the first quarter of 2023. According to DXB Interact, the price per. sq. ft. for the property in April 2023 increased to AED 1,278 from 1,150 in April 2022 – a YoY increase of 11.1%. When compared to the highs of April 2014, the property prices in April 2023 increased by 23.7%.

The median price per sq. ft. for an Off-plan apartment in April 2023 stood at AED 1,644 while the prices for an Off-plan villa were AED 1,278. The prices per sq. ft. for Off-plan Commercial property were AED 2,168.

The median price per sq. ft. for the Ready apartment in April 2023 was AED 1,138 while the price per sq. ft. for the Ready villa was AED 983. The price per sq. ft. for the Ready Commercial was AED 927 while the price per sq. ft. for the plot was AED 500.

Most Expensive Properties Sold in April 2023

Villas – Emirate Living remained the top choice of ultra-rich and HNWIs in April 2023 to buy premium villas with the most expensive villas sold worth AED 150 million, followed by Palm Jumeirah (AED 76 million), Elysian Mansions, Tilal Al Ghaf (AED 44 million), Jumeirah Golf Estates – Hillside, Jumeirah Golf (AED 36 million), and Golf Place, Dubai Hills (AED 33 million).

Apartments – The top 5 projects with the most expensive sold apartments were – Bulgari Lighthouse Dubai at Island 2 (AED 137 million), Six Senses Residences The Palm, Palm Jumeirah (AED 58 million), Orla By Omniyat, Palm Jumeirah (AED 58 million), One At Palm Jumeirah (AED 50 million), and  Bluewaters Bay – Building 2, Marsa Dubai (AED 42 million).

Most Popular Areas in April 2023 

According to DXB Interact, the top 5 areas in Dubai that witnessed the highest real estate transactions in April 2023 were -Jumeirah Village Circle (1027 transactions worth AED 847 million), Dubai Marina (637 transactions worth AED 1.9 billion), Business Bay (595 transactions worth AED 996 million), Dubai Hills Estate (466 transactions worth AED 969 million), Dubai Creek Harbour (405 transactions worth AED 828 million).

The most popular areas to buy Villas – Damac Lagoons, Arabian Ranches Iii, Damac Hills 2, The Valley, and Tilal Al Ghaf.

The most popular areas to buy Apartments – Jumeirah Village Circle, Dubai Marina, Business Bay, Dubai Hills Estate, and Dubai Creek Harbour.

The most popular areas to buy Commercial – Business Bay, Jumeirah Lake Towers, Al Warsan First, Mohammed bin Rashid City, and Al Thanyah First

The most popular areas to buy Plots – Jumeirah Park, Jabal Ali First, JVT, Dubai Industrial City, and JVC