{"id":2246,"date":"2016-01-22T14:16:00","date_gmt":"2016-01-22T07:16:00","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=2246"},"modified":"2016-01-22T11:51:26","modified_gmt":"2016-01-22T04:51:26","slug":"cladding-issues-could-mess-with-dubai-property-market-after-the-address-fire","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/cladding-issues-could-mess-with-dubai-property-market-after-the-address-fire\/","title":{"rendered":"Cladding issues could mess with Dubai property market after The Address fire"},"content":{"rendered":"


\n
\nHow will the fire at The Address affect property prices in Dubai?Nobody can be exactly sure how The Address fire on New Year\u2019s Eve will affect Dubai property prices. But as high-rise building freehold owners and insurance experts become increasingly nervous about the cost implications of a government survey of all properties to ensure that they conform to the latest fire regulations, the owners of individual units are also worried.
\nAt the very least, it is reasonable to assume that it is going to be more difficult to sell such units in the immediate future, and if they are rented out then they are not going to be as popular. Conducting a full survey of the estimated 900 high-rise buildings in the city is going to take time, and so will carrying out whatever remedial work is deemed necessary. Some buildings may need to be completely re-clad to be classified as safe again.
\nThere will also have been some long-term damage to the reputation of Dubai as a safe city to live in, although it is impossible to quantify, and it is clear that the authorities will do whatever is possible to rectify this situation.However, the property market is certainly not going to be unchanged by the events of New Year\u2019s Eve, which were watched by tens of millions of partygoers on televisions around the world, and the aftermath in terms of blighting the market for a section of Dubai\u2019s real estate cannot be overlooked either.
\nThe most logical response from buyers would be to favour property in buildings that are unaffected by possible cladding issues over those that may be. Fewer buyers for those buildings will lower prices in the marketplace. The quicker a building is cleared, the better for prices of its apartment units. But equally, this cannot be done in too much of a hurry, or the impact on confidence will not be sufficient to overcome the damage done.
\nApartment owners in these towers are caught between the devil and the deep blue sea. Sitting this problem out is the best answer. Things could get better faster than expected.For example, interim improvements may be implemented swiftly to make high-rise buildings safer. Simple but effective measures such as sealing balconies so that nobody can smoke on them or light a barbecue fire could be imposed.
\nOwners who have rented their units out are likely to face difficulties with tenants who may want to leave or expect a reduction in their rent to stay. The current law protects a tenant\u2019s right to stay but does nothing to secure the landlord\u2019s position beyond a small penalty for the tenant leaving.On the other side of this equation, unless the confidence in Dubai high-rise towers can be restored quickly, there should be a rising premium on low-rise apartment developments and villas. A rising demand for the existing supply of the latter will put an upward pressure on selling prices and rental costs.
\nThis new dynamic in the Dubai real estate market comes alongside what was already looking like a difficult year ahead following an already established downturn of 18 months to two years, depending on how you view it. The UAE property sector was facing several other factors that augur badly for the year ahead: overseas buyers are vanishing, mortgage rates are going up and consumers are heavily indebted.
\nRussian and Chinese buyers are thin on the ground. The US dollar-linked dirham is at a 12-year overvaluation against major global currencies, and this makes buying a property in the UAE more expensive for many would-be foreign buyers. Global financial markets are also in turmoil. Mortgage rates are rising in the UAE, and this makes buying a home more expensive in terms of regular payments. An increase of 0.5 percentage points sounds like nothing until you realise that translates into about a 12 per cent rise in monthly mortgage payments.
\nFinally, The National has carried many articles recently about how local consumers are drowning in personal debt after binge consumption during the good times. When credit is this extended, consumers are hardly in a position to take on a home loan even if they would like to. The Address fire at the New Year compounds these difficulties for the third year of a bear market for Dubai real estate.If you want to be optimistic, then you could see this as just setting up even better buying opportunities at the market bottom, and perhaps protecting low-rise villas and apartments from a further downturn.
\nPeter Cooper has been a senior business journalist in the Arabian Gulf for the past 20 yearsbusiness@thenational.aeFollow The National\u2019s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Cladding issues could mess with Dubai property market after The Address fire<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

How will the fire at The Address affect property prices in Dubai?Nobody can be...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-2246","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-Ae","jetpack-related-posts":[{"id":2564,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/owners-of-dubai-high-rises-urged-to-check-insurance-after-the-address-downtown-fire\/","url_meta":{"origin":2246,"position":0},"title":"Owners of Dubai high-rises urged to check insurance after The Address Downtown fire","date":"January 25, 2016","format":false,"excerpt":"\r \r DUBAI \/\/ Owners of high-rise homes in Dubai have been urged to examine their building insurance policies before an expected barrage of litigation over the New Year\u2019s Eve fire at The Address Downtown.As a result of the fire, authorities ordered checks on every building, amid suggestions that the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":43083,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/emaar-to-receive-dh1-22-billion-insurance-claim-on-address-downtown-hotel-fire\/","url_meta":{"origin":2246,"position":1},"title":"Emaar to receive Dh1.22 billion insurance claim on Address Downtown hotel fire","date":"February 6, 2017","format":false,"excerpt":"\r Dubai developer Emaar Properties has agreed a billion dirham insurance claim with Orient Insurance over the dramatic fire at its Address Downtown hotel on New Year's Eve 2015. In a statement to the Dubai bourse this morning Emaar confirmed that it had agreed the Dh1.22 billion insurance claim with\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16278,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/alubond-stops-making-plastic-filled-cladding-used-in-the-address-downtown-dubai\/","url_meta":{"origin":2246,"position":2},"title":"Alubond stops making plastic-filled cladding used in The Address Downtown Dubai","date":"June 12, 2016","format":false,"excerpt":"\r The company that supplied the facade cladding of the Dubai hotel that erupted in a blaze on New Year's Eve has scrapped the manufacture of plastic-filled panels. Alubond, the world's largest maker of aluminium composite panels and the company that supplied The Address Downtown Dubai, will no longer make\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4319,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/emaar-reports-full-year-gains-despite-the-address-downtown-dubai-blaze-writedown\/","url_meta":{"origin":2246,"position":3},"title":"Emaar reports full-year gains despite The Address Downtown Dubai blaze writedown","date":"February 11, 2016","format":false,"excerpt":"\r \r Emaar Properties posted fourth-quarter results that missed expectations after a Dh301 million writedown arising from the New Year's Eve, blaze at its flagship hotel in Dubai. Net profit in the three months to December 31 was Dh1.03 billion, a 1 per cent drop from a year earlier, the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4321,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/emaar-earnings-hit-by-the-address-downtown-dubai-blaze-writedown\/","url_meta":{"origin":2246,"position":4},"title":"Emaar earnings hit by The Address Downtown Dubai blaze writedown","date":"February 11, 2016","format":false,"excerpt":"\r \r Emaar Properties posted fourth-quarter results that missed expectations after a Dh301 million writedown arising from the New Year's Eve, blaze at its flagship hotel in Dubai. Net profit in the three months to December 31 was Dh1.03 billion, a 1 per cent drop from a year earlier, the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":809,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/insurance-premiums-in-focus-after-the-address-downtown-dubai-fire\/","url_meta":{"origin":2246,"position":5},"title":"Insurance premiums in focus after The Address Downtown Dubai fire","date":"January 6, 2016","format":false,"excerpt":"\r \r Insurers are set to review building premiums after the New Year\u2019s Eve blaze at The Address Downtown Dubai.The fire at the hotel was the latest in a string of building blazes in Dubai last year, including ones at The Torch Tower at Dubai Marina in February and the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/2246"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=2246"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/2246\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=2246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=2246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=2246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}