Islamic finance is fast gaining momentum around the globe as countries look to cash in on a market that ratings agency Moody's forecasts could hit $5 trillion over time. But Islamic finance has no global standardisation, which means individual countries have to tweak regulations to accommodate the market. Here are examples of what some nations have done to accommodate Islamic finance and what they still need to do. MALAYSIA - Malaysia's central bank has tightened sharia rules for Islamic banks by requiring them to set up sharia review, audit and risk management functions to reinforce compliance. Rules for standardising Islamic financing structures such as ijara, mudaraba and musharaka are seen by the end of 2010. Malaysia also has a national sharia council whose financial rulings are used throughout the country's Islamic financial institutions. Some critics, however, think Malaysia's regulators are too liberal in their interpretation of sharia and allow products to mimic conventional banking products. UNITED ARAB EMIRATES - The UAE has launched a series of Islamic finance tailored handbooks designed to help firms embarking on Islamic finance in the Dubai International Financial Centre. All Islamic finance companies within the DIFC are expected to adhere to AAOIFI guidelines and Islamic banking activities are guided by the central bank. The appointment of sharia committees at these companies depends on the approval of the Ministry of Islamic Affairs. SAUDI ARABIA - Saudi laws, by definition, are required to adhere to sharia so the Saudi Arabian Monetary Agency makes no differentiation between conventional and sharia-compliant banking. The kingdom is planning to issue its first sharia-compliant mortgage law which is expected to fuel more Islamic home finance in both individual and corporate arrangements. The plan has been in the works for over two years but is expected to pass in 2010. In addition, experts say Saudi will play a major role in sukuk issuances this year given its liquidity and high focus on infrastructure buildup. Saudi's Dar Al Arkan was the first sukuk to price this year in an otherwise lackluster market. BAHRAIN - Bahrain's central bank was the first to make AAOIFI standards mandatory for all Islamic institutions. The central bank also has rules covering capitalisation, risk management, financial crime and disclosure and is pushing to train sharia scholars to aid industry growth. UNITED KINGDOM - The nation aims to be the global capital of Islamic finance. The UK introduced legislation to provide relief from capital gains tax and stamp duty land tax for sukuk issuances and sharia-compliant home mortgages. Value added tax, however, remains a concern for some transactions. FRANCE - France has taken baby steps to changing its taxation rules for financial transactions. It has issued tax guidelines to potentially avoid value added tax on murabaha contracts and is addressing whether sukuk payment is a tax-deductible item for the issuer. It has been touting the possibility of issuing a 1 billion Euro sukuk but that has not yet materialized. LUXEMBOURG - The country is promoting itself as a haven for sukuk and Islamic investment funds. It has signed tax treaties with the UAE, Qatar, Kuwait and Bahrain. Currently Islamic investors enjoy no double stamp duty, no wealth tax and no liability to Luxembourg tax on profits and income. UNITED STATES OF AMERICA - Islamic finance is largely confined to allowing for sharia-compliant mortgage products for ijara or murabaha structures. Under regulatory rules, a bank must be a lender, which inhibits the development of standalone sharia-compliant institutions. And political risks also cast Islamic finance in a negative light. INDONESIA - The parliament passed a law last year removing double taxation on Islamic instruments as of April 2010. But experts say the government must create a sukuk issuance law to boost the market. Given the huge Muslim population, changes to the regulatory framework could make Indonesia a powerful player. AUSTRALIA - Australia's assistant treasurer recently went on a tour of the Gulf states with Islamic finance in his sights. The country is looking to revamp some of its taxation laws to accommodate Islamic finance growth in the country. Experts see it as a hot market for the industry, once laws are overhauled. INDIA - The finance ministry is now considering allowing for non-banking finance companies to offer Islamic banking products in the country but under current rules, such businesses would face double taxation. Commercial banks are still prohibited from offering Islamic finance products.

A senior Saudi official denied on Monday that he had said the council of ministers would approve a long-awaited mortgage law this week. Abdul-Rahman al-Sadhan, the secretary general of the council of ministers, said in remarks published by al-Hayat newspaper that comments he made in Sunday's paper about the law being approved this week were misinterpreted. "(I expressed the hope) that its approval was near," Sadhan said on Monday. On Sunday, al-Hayat quoted him as saying that the draft law would enter its final phase this week. The law is expected to revive a slowing lending market as it would cater to a larger proportion of housing demand in a country where less than a third of the population owns a home. Industry sources say the world's top oil exporter needs 2 million more houses. The law has been in the planning stages for almost a decade. Finance Minister Ibrahim al-Assaf last year said it would be implemented before end-2009.

The Jordanian real estate market continues to decline at a minimal rate with some sectors of the market showing signs of rents and values stabilising, while sales activity remains flat, according to leading regional and international real estate services firm Asteco. “Residential leasing is more active than sales, with demand for smaller-sized one to two-bedroom properties in Abdoun, Sweifieh and Der Ghabar - particularly from non-Jordanians working in Amman. The number of Jordanians returning to Jordan from the GCC has not impacted the rental market as expected,” says Asteco in its report on the Jordanian property market for the first quarter of 2010 published today (21 April 2010). “Property sales have remained relatively flat in the last few months, with limited transaction activity. Many of the high-rise tower projects under design have been put on hold until confidence in the market returns and the cost of raw materials is reduced. Interest remains healthy for smaller units with some of the major banks announcing improved mortgage facilities. “Sales activity has been relatively flat over the last three months for all property types. However, new mortgage terms recently introduced by banks are expected to aid the real estate market to a degree,” the report adds. In the office sector, the rental market continues to decrease, albeit at a slower rate than in the previous quarter, says Asteco. “Mecca Street remains one of the most important areas in terms of the office rental market due to the superior grade of buildings available, location and reduced rents.” Asteco expects rental rates to continue to fall slightly due to businesses slowing down, companies downsizing and relocating to smaller offices. Commenting on the office sector, Asteco CEO Elaine Jones said: “Landlords need to be competitive not by simply reducing rental rates but by offering value added services and incentives such as rent-free periods and properly managed buildings to ensure longevity of tenants.” “The number of office properties for sale is limited in Jordan, with only a handful of properties available in areas such as Jordan Gate Tower, Emaar Tower and the Al Abdali area,” the report says. “Activity in the commercial market has, therefore, been seen primarily in the leasing market. Some of the larger Jordanian companies are interested in purchasing buildings to house their head office. However, with the uncertainty in the market, plans for expansion and the possession of assets have been put on the back-burner until market sentiment changes. “Those tower projects which are for sale are not attracting corporations, particularly banking institutions, as they tend to retain their own land and build to occupy as their corporate head offices. Low-rise properties in the Al Abdali area are expected to launch this year and are likely to offer attractive pricing levels to stimulate opportunities for investors. “Progress is being made with the Development Zones Commission recently sealing a number of agreements with Arab and foreign investors who expressed interest in investing in Jordan’s development zones. In addition, efforts are being made to promote the country’s six development areas.”

The size of the mortgage market in Bahrain reached $1.4 billion by the end of last month, making it one of the comparatively stable realty markets in the GCC (Gulf Cooperation Council). "The completion of landmark projects like Amwaj lands, Durrat Al-Bahrain and many properties in Juffair has helped to keep the market at sustainable growth levels," said R. Lakshmanan, chief executive officer of Sakana Holistic Housing Solution. Lakshmanan, who was talking to the media during the handing over ceremony of the $25 million Nasmah Freehold Tower, said despite the soft market conditions, the new projects were being announced by developers to meet the growing demand for new housing units. Talking about overall market conditions, he said realty has shown a sign of recovery but 2010 would remain a challenging year for mortgage companies and developers. "With the slump in the real estate market land prices have declined by 15 percent while investment land nosedived up to 60 percent in 2009. The prices of residential units have seen a 20 to 25 percent decline in prices across the board," he added. Sakana, the innovative Islamic mortgage finance provider, announced the successful completion of its first project into property consultancy - the freehold, residential development Juffair-based tower Nasmah valued at $25 million. This freehold project was developed by RMK Projects, a division of R. M. Kooheji & Sons. "Nasmah sales was Sakana's successful entry into property consultancy, Nasmah tower was completely sold out in the launch and it's now open to the secondary market and we are really proud to announce today the completion of this tower and delighted to deliver to our customers their dream home in affordable price and excellent quality," Lakshmanan said. "Despite the economic slowdown and construction activity scaled down across the country and the region 'Nasmah' has progressed and completed. We would like to thank all our customers, contractors and suppliers for their continuous support and trust in our project," said Ishaq Al-Kooheji, president and CEO of RMK Projects. "Nasmah which means a breath of fresh air in Arabic is an affordable freehold apartment tower consisting of 122, 2-bedroom apartments, each with a balcony and offering either city or seaside views. "The building has a rooftop swimming pool, a fully-equipped fitness center, a squash court, event hall and other amenities," he added. He said the group would also launch another housing project with an estimated cost of $25 million. "The Bahraini market is one of the most competitive housing markets in the GCC and that's why the demand has remained in the market despite the economic slump," he said

The recently released figures by the UAE Central Bank claim that the total mortgage loans of 24 national banks and 28 foreign units reported decline in growth to stand at Dh15billion in the first 11 months of 2009. This decline in the mortgage credit growth slowed down apparently under the impact of unfavorable conditions of the economic market due to global financial crisis. The figures show that mortgage credit growth declined about 12 per cent during January-November 2009 as compared to a robust growth of 123 per cent during 2008. Mortgage credit remained under pressure due to liquidity crunch and overall slowdown in the real estate sector of the country. Mohammed Al Asumi, a UAE-based economist confirmed decline in mortgage loans due to various national and international factors and said that lenders are still adopting very cautious approach to lend people apprehending further decline in business confidence. Al Asumi added, "The banking sector also has liquidity shortages. This has made them even more careful. Another factor is the real estate downturn. All these factors contributed to the slowdown in mortgage loans."

85 percent of respondents see 10 pct-plus returns in 2010 * Just 13 pct of respondents say U.S, UK returns will match Property investors are most bullish about developing Asian markets next year, as concerns of a second pricing dip across debt-drenched mature markets crimp returns expectations in 2010, an exclusive Thomson Reuters (TRI.TO) survey showed. Some 85 percent of the 150-strong audience at the annual Thomson Reuters Global Property Outlook said they expected developing Asian markets like China to deliver total returns in excess of 10 percent next year as economic growth feeds demand for homes, shops and offices. By contrast, just 13 percent of those delegates surveyed said UK or U.S. 2010 total property returns would match those seen in developing Asia, even though both markets looked to be nearing the twilight of their real estate corrections. 61 percent of the audience said they expected UK total returns between zero and 10 percent next year, broadly in line with Eurozone total property returns for the same period. Around half of respondents expected to see the same zero-to-10 percent total returns range in developed Asian markets like Korea and Tokyo as government measures to thwart real estate bubbles bear fruit. Thin transaction volumes and unclear changes in pricing have damaged sentiment towards the U.S. property market, where the volume of distressed property hit $140 billion by end-October, Real Capital Analytics data shows. A narrow majority of 42 percent estimated U.S. total property returns between minus 10 percent and zero, while 39 percent of those surveyed expected returns between zero and 10 percent. Congested credit markets and a reluctance among some banks to lend to real estate has encouraged bargain-hunters to delay investment sprees, and 61 percent of respondents said they expected a "flat" property market next year. There was less conviction on the topic of Dubai, illustrating continued fear among property investors that the worst global real estate slump for generations was not over yet. Around half the respondents said they believed Dubai's debt crisis was a sign of further troubles to come for highly-leveraged property markets, while 37 percent said the problems were too small to spark a calamity outside the Gulf region. Until valuations stabilise further and banks resolve massive exposures to distressed property loans, real estate will have to compete strongly to maintain its weighting in a diversified portfolio, the survey results indicated. Stocks was the preferred asset class among the survey respondents, with 33 percent expecting shares to perform best in 2010, versus 28 percent picking property and 26 percent selecting commodities.

A lack of accurate property valuations, delayed handovers, a mortgage shortage and the absence of comprehensive rental contracts are some of the major challenges faced by the UAE's commercial sector, say real estate experts. "There are challenges for commercial properties in the UAE with respect to valuation and lending for borrowers," said Michael Lunjevich, a partner at Hadef & Partners. "Furthermore the provisions of rental contracts are not explicit with respect to payment terms. "Other issues include build quality, delayed handover, foot-fall for retail, and infrastructure and roads for Business Bay projects. And the office sector may be hit by the flow of strata offices, which may not meet the market demand dynamics." Need for authentic data Lunjevich called for more clarity over whether projects in Dubai were cancelled or put on hold. "The market needs clarity on what is and isn't going to move ahead. Supply and demand figures vary between analysts. Better analysis and data would bring back confidence in the commercial real estate sector," he said. Porush Jhunjhunwala, Manager, Commercial Leasing, at Better Homes, said: "The uncertainty in the market caused by the lack of available debt financing, potential oversupply and quantifying end-user demand are some of the challenges in the commercial sector." Better Homes says Dh100 billion has been invested in Dubai's commercial real estate sector over the past five years. Sana Kapadia, Vice-President, Equity Research, at EFG-Hermes, said: "Limited feasibility analysis in terms of demand and supply demographics has been accentuated in the commercial sector as businesses curb their expansion and upgrade plans in light of the weaker economic picture." Oversupply vs demand Harbor Real Estate Managing Director Mohanad Alwadiya said: "The shortage of class A space in Abu Dhabi has resulted in a more restrained price correction compared to the Dubai market, which is expected to witness a wave of supply in 2010. "The oversupply and decline in commercial demand and activity must be arrested in order to secure a healthy and sustainable commercial property sector. "Once over-priced, now opportunistic, the commercial segment continues to struggle with the most activity being generated by commercial clients relocating premises to avail themselves of cheaper lease rates and relocation opportunities that offer them better facilities and premium space. "Being heavily dependent on the economic recovery and resulting commercial activity, a turnaround in this segment is unlikely before Q2 of 2010." Alwadiya said the vacancy levels in Dubai ranged around 30 per cent and this figure is expected to go up further due to the slowdown in the business sector and the expected additional supply from developments in Jumeirah Lake Towers (JLT), Business Bay and Dubai International Financial Centre (DIFC), which are due for completion in 2010. In Abu Dhabi the vacancy levels hover around six per cent to 10 per cent. Michael Grant, Commercial Property Manager at LLJ Property, said: "Over the last few years, the commercial office market in Abu Dhabi has suffered from a shortage of office space, particularly quality space with parking. "Next year will see the completion of a number of new buildings finished to international standards, though parking will remain an issue for the majority of new towers, particularly in the Corniche area, as they have only a limited number of spaces. "However, because of the global financial crisis the principal challenge in Abu Dhabi will be matching major corporates' need for quality of consolidated offices with their budgets, and cost will be the principal driver," said Grant, Ancillary retail space He said the master developers and local developers are striving hard to provide quality commercial space in Abu Dhabi to meet the requirements of international corporates in terms of providing good-size shell and core floor plates. "However, plot sizes are often restrictive. What the master plan projects will no doubt benefit from is their ability to provide ancillary retail space for eating, shopping, banking, health and fitness. Corporates look for such facilities in order to reduce desk time and enhance quality of working environment," said Grant. Nicholas Maclean, Managing Director of CB Richard Ellis (CBRE), Middle East, said: "The supply situation in Dubai commercial market is very fragmented with strong demand coming from our international corporate clients for buildings either within DIFC or in respect of buildings in single ownership in onshore locations. We have experienced almost no demand for strata title buildings." CB Richard Ellis has seen a significant upturn in the activity of its global corporate clients in the GCC and a majority of this demand is concentrated in the UAE, with Dubai taking the lion's share of the activity. Jhunjhunwala said a number of companies had opened offices in Dubai and many more were exploring the market. "As an example, Yahoo has recently moved its Middle East headquarters to Dubai." He said the quality of finish of a unit depends upon the landlord's target market where the developer would like to position his property. It varies from project to project. "Dubai has a number of completed prime commercial projects and is striving to establish quality commercial real estate," he said. Grant said new companies were being set up in the capital not only in the oil and gas sector but also in the technology and energy sectors to support Masdar City. Harbor Real Estate has seen demand from new companies in the legal, research and financial auditing sectors. "Many of these companies are taking advantage of the current economic situation to cater for the increasing demand for such services," said Alwadiya. "Most of these new businesses are benefiting from the bargains and reduced set-up costs the current market offers." According to Better Homes, yields in Dubai's commercial sector are currently between six and eight per cent, depending on the project location

Reuters, Dubai-Troubled Dubai Islamic mortgage lender Amlak, which is merging with Tamweel, posted a fourth consecutive quarterly net loss. The Islamic mortgage lender had a third-quarter net loss of Dh45 million ($12.25 million), it said in a statement. Amlak had a loss of Dh178m in the first nine months of the year due to "further prudent general provisioning on mortgage financing portfolio", the statement said. "We are also close to a final announcement by the Federal government regarding their decision which will further fortify our business operations and investor confidence," said Ali Ibrahim Mohammed, the company's vice chairman, referring to the merger. Amlak and Tamweel are expected to be merged in the first quarter of 2010, Tamweel's chairman Sheikh Khaled bin Zayed Al Nahyan said in November. Amlak reported net profit attributable to shareholders of Dh174.33m in the third quarter of 2008. Operational profit before provisions and impairments stood at Dh39m for the nine-month period and total provisions for financing business stood at Dh313m, Amlak said in the statement. The United Arab Emirates government said in November 2008 it would merge Amlak and Tamweel and a state panel led by the economy minister has been reviewing the plans. In October, the minister said the panel is recommending merging the two lenders into a single, Islamic bank next year. Both stocks have been suspended since November last year.

Brokerage companies with a long-term vision to remain in Dubai's real estate sector are now more willing to invest in training and research to enable their agents deliver better service, said the head of a real estate agency. Mohanad Alwadiya, Managing Director of Harbor Real Estate, said agencies are making greater efforts to retain talent in the sector. "I am willing to pay higher commissions and packages to agents as long as they deliver. We are investing in right talented resources that can deliver the results." He said brokerage companies were now taking a totally different approach to selling as the real estate market has become a buyers' market. "Dubai's real estate market today is a totally different market from what it was pre-crisis. Last year, it was a sellers' market and the buyers were not given the right attention. Today, buyers are treated well since it is their market and they should be getting the right customer service." He said the two-day certified training programme by Real Estate Regulatory Agency (Rera) for new agents was not enough to raise the efficiency levels of the agents to conduct business. "In our company, we conduct internal training programmes for our agents even after they complete the two-day certified programme from Rera, so that they are better equipped to conduct business in the real estate market," Alwadiya said. Harbor Real Estate currently has around 17 agents in its Dubai office. The company also has sister companies – Residencia Real Estate and Access Global Real Estate.

Qatar house prices are poised to ease 15 per cent in 2010 on higher supply but the construction sector would grow as 40 per cent of the state budget is earmarked for infrastructure, The First Investor Asset Management said. “We expect 2010 to be the bottom in terms of prices but we don’t necessarily see any upturn in 2011 as being aggressive because of the supply coming in,” Keith Edwards, head of asset management at the investment bank, said yesterday. House prices in the world’s largest exporter of liquefied natural gas fell 20 per cent during the first nine-months of 2009, Edwards said. Prices appear to be set to fall another 15 per cent in 2010 as around 10,000 homes are expected to be built in the same year with additional supply seen in 2011, he added. But country’s construction sector has a rosy outlook and is set to grow five per cent in 2009, driven by infrastructure, to around $5.2 billion (Dh19bn), about 40 per cent of the country’s budgetary expenditure, according to the firm’s estimates. “Qatari-listed cement firms were the best performing cement firms in the third quarter in the GCC region showing that there is still demand for building materials and construction is still going on, albeit at a slower pace,” said Patrick Rahal, senior analyst, asset management at the investment bank. An increasing number of international contracting firms are winning contracts in Qatar, and elsewhere in the region like Abu Dhabi and Saudi Arabia as they look to diversify their portfolios and weather the crisis. In contrast, few contracts are being won in Dubai’s real estate sector, where prices are off some 50 per cent from their peaks in 2008

KUWAIT -- The Kuwaiti real estate scene had witnessed a revival by the final quarter of 2009 especially in new housing areas, said a real estate expert on Saturday. Head of the real estate evaluation department at Meshkat real estate group Yousif Al-Alyyan told KUNA that buyers were very keen on purchasing housing lands in South Surra, Al-Uqaila, Eshbilya, West of Jeleeb, and Qurain areas, adding that prices went down in the beginning of the second quarter of 2009 with a 400-meter piece of land costing KD 100,000, the land now costs KD 130, 000. He revealed that lands in Khairan residential area were at KD 30-40,000 but now it went up to 50-55,000. This applied to other housing lands which saw a drop in prices and a now are witnessing a surge in prices, stated Al-Alyyan, noting that new areas are the most dealt with housing material in the Kuwait Stock Exchange (KSE). Regarding the real estate investments, Al-Ayyan said that there was strong demand on new buildings in the Mahbola, Abu Hulaifa, Fintas, and other areas. Commercial real estate investments was always on a high level concerning prices despite the lack of demand on such properties but when a deal occurred it would be always high priced. © KUNA (Kuwait News Agency) 2009

Economists described a plan to establish a fund to finance real estate activities as unpractical. "It is too good to be true," banker Mefleh Aqel commented on the scheme proposed by the Housing Investors Society (HIS). The plan entails setting up a finance company by Jordanian developers and investment funds from Gulf countries to facilitate housing loans in the Kingdom. According to HIS President Zuhair Omari, investment funds from Kuwait, the United Arab Emirates and Saudi Arabia are interested in establishing the fund with a capital up to JD500 million, which he said will stimulate the property market in the Kingdom. "Local banks' strict lending measures and loans at high interest rates and short repayment period forced investors in the real estate to look for other alternatives believing that establishing a finance leasing company is the only solution," he said. He told The Jordan Times on Thursday that the proposed lending company would provide housing loans with flat interest rate of 4 per cent based on Islamic principles and longer maturity period that may reach 30 years. Tayseer Smadi, the chairman of the Islamic International Arab Bank, said talk of strict lending measures has become a common platform to blame the current slowdown in various sectors, adding that banks do not reject providing credit facilities to those who are eligible. "Banks give housing loans with a repayment period up to 25 years," he indicated, explaining that Islamic banks in Jordan enjoy high liquidity levels with a large portion of their loans going to the construction and housing sectors. The idea of establishing such a fund to extend mortgage loans raises questions on whether such an institution will be able to survive in the long term and on what would be the criteria for providing credit facilities. Aqel said that the proposed plan is based on a high degree of optimism because it cannot be practical and objective. However, Omari indicated that within the next few weeks the idea of the project will be clearer, saying that a preparatory committee is studying the plan to be discussed with the government soon as it entails financial funding from other countries. Banker Fahmi Abu Dayeh said there is a "great opportunity" for the project to succeed because there is a large market for Islamic financing tools as the market in the Kingdom is not saturated yet with Islamic banking services. "Such fund will also bring more investments to the real estate sector in Jordan, and I'am sure that local banks will enter such project sooner or later," Abu Dayeh said. © Jordan Times 2009

Mashreqbank has made the decision to enter Dubai's home finance market, rather than wait for freehold ownership laws to come onto the statute book. The bank now offers mortgages on Emaar, Nakheel and Estithmaar's developments, at a rate of 6.49% until the end of 2004 and over a period of up to 15 years. "We feel it is critical for us to participate in this sector," said Abdul Aziz Al Ghurair, chief executive officer of Mashreqbank. "We need it to complete our range of offerings to our customers." The bank says it has entered the market now, rather than wait for foreign ownership of freehold property to become legal, because the opportunity is too large to miss out on. It is also confident that the necessary legislation will be passed eventually. "We're told it is coming, we're told it will happen, I believe it will happen," said Al Ghurair. Mashreqbank is now one of four institutions to offer financing on freehold properties, along with Dubai Islamic Bank, Amlak and HSBC. Mashreq is the first conventional UAE bank to offer mortgages, a move that may prompt banks that had decided to wait for legislation to also enter the market. Mashreq's current interest rate of 6.49% is a symbolic 0.01% below the 6.5% that Amlak quotes in its sales brochure, and is also below Dubai Islamic Bank's fixed repayment rate of 7% over a five year term and 8% over ten years. The bank asks borrowers for a down payment of 20-30%, roughly in line with competitors. After 2004, Mashreqbank's mortgage interest rate will be set at LIBOR plus 4.99%. The bank requires borrowers to take out home insurance through one of its subsidiaries and health insurance through any authorised provider. The bank estimates that up to Dhs40 billion will be spent on freehold properties in Dubai over the next five years.

There are reasons for optimism in the Dubai real estate market as demand is starting to return in the sector, according to an HC Brokerage report. Recent figures have revealed that in the first three quarters of 2009, the profits of the five largest real estate firms in the United Arab Emirates (UAE) dropped by more than 80 per cent. In the first nine months of the year, year-on-year the combined profits dropped by 82.3 per cent for Deyaar, Sorouh, Aldar Properties, RAK Properties and Emaar Properties, reports Emirates Business 24/7. However, the report indicated that attractive rentals in Dubai mean that former residents of the emirate are starting to return now that prices have fallen. "There appears to be several factors at play, including: improving sentiment and risk appetite; a negative real interest environment; steady volumes; and attractive rental yields," it stated. This comes after the Colliers International Dubai House Price Index indicated that in the third quarter of 2009, prices rose by seven per cent in the emirate.

There are reasons for optimism in the Dubai real estate market as demand is starting to return in the sector, according to an HC Brokerage report. Recent figures have revealed that in the first three quarters of 2009, the profits of the five largest real estate firms in the United Arab Emirates (UAE) dropped by more than 80 per cent. In the first nine months of the year, year-on-year the combined profits dropped by 82.3 per cent for Deyaar, Sorouh, Aldar Properties, RAK Properties and Emaar Properties, reports Emirates Business 24/7. However, the report indicated that attractive rentals in Dubai mean that former residents of the emirate are starting to return now that prices have fallen. "There appears to be several factors at play, including: improving sentiment and risk appetite; a negative real interest environment; steady volumes; and attractive rental yields," it stated. This comes after the Colliers International Dubai House Price Index indicated that in the third quarter of 2009, prices rose by seven per cent in the emirate.

Mortgage lender Abu Dhabi Finance has agreed a deal to provide home loans to people buying apartments in the new RAK Tower development. The real estate project, which is situated in Marina Square, Reem Island, is a 43-storey tower, complete with swimming pools, gym and gardens. Developer RAK Properties expects work on the site to be completed by the middle of 2010 and has now announced details of the financing options available to prospective buyers. It has linked up with Abu Dhabi Finance to offer mortgages of up to 85 per cent loan-to-value for the range of one to five-bedroom apartments in the tower. Mohamed Sultan Al Qadi, chief executive officer and managing director of RAK Properties, said he was delighted to be able to offer buyers such finance options and added: "This agreement builds up further confidence in our company and its projects." Abu Dhabi Finance recently announced a deal with Aldar Properties to offer mortgages to people buying homes in three districts of the Al Raha Beach development

AMMAN -- Real estate trading during the first 10 months of 2009 dropped by 31 per cent to JD3.7 billion from JD5.4 billion during the same period of 2008. As a result, revenues collected by the Department of Land and Survey (DLS) went down by 36 per cent to JD2.1 billion from JD3.3 billion. DLS figures showed that 68,078 transactions of property purchases were executed during the first 10 months of this year compared to 79,488 in the same period of last year, Sales of residential apartments also declined to 16,710 units from 18,723 apartments but demand was higher during the third quarter of this year compared with the previous two quarters. A total of 8,006 residential apartments were sold in the first six months of 2009, while sales almost doubled during the July-October period, according to DLS figures. Experts in the real estate market attributed the increasing demand on residential apartments during the past few months to the government's decision to widen the exemption on the first 120 square metres of apartments sized 150 square metres or less, to apartments sized 300 square metres or less. Zuhair Omari, the president of the Housing Investors Society, told The Jordan Times that buyers wanted to benefit from the Cabinet decision to exempt more apartments from registration fees upon purchase. The exemption is only valid until the end of this year. "The decision helped the sector recover in the third quarter of this year as buyers did not want to miss the opportunity to benefit from the exemption," Mohammad Shobaki, a marketing manager in a real estate firm noted. Statistics confirmed the upward trend as real estate trading during October reached JD417 million, 35 per cent higher than the previous month and 2 per cent over October 2008. According to the department's figures, exemptions on residential apartments amounted to JD17.4 million since the Cabinet's decision was taken on May 20. Property purchases by non-Jordanian investors accounted for JD221 million during the first 10 months compared with JD155 million for the same period of 2008. Iraqi nationals ranked first with JD108 million followed by American and Saudi buyers, accounting for JD18 million and JD17 million respectively, according to DLS. Jordan Times

The need for a mortgage finance agency to facilitate and expedite the development of the real estate and property markets has been highlighted on Tuesday during a Dubai International Financial Centre (DIFC) forum. Speakers and delegates attending the DIFC Economics Workshop on Housing Finance, evaluated the current scenarios, identified the key challenges facing the real estate sector in the region and discussed possible solutions. It was generally agreed that the activation of home finance flows near to pre-crisis levels was the key to faster recovery and future growth of the real estate sector, the building and related industries and regional economy in general. However, the need for better risk management in the property development and financing sector and establishment of an improved real estate legal and regulatory framework in the region was also highlighted. Dr Nasser Al Saidi, Chief Economist of the DIFC Authority, explained the rationale behind holding the workshop. "DIFC hosted the Economics Workshop on Housing Finance as the real estate sector is a major contributor to the region's economic activity, representing major investments that have been made in the residential, commercial and industrial structures capital stock. It was one of the first to get affected by the still on-going global financial crisis and we need to find ways to re-energise it. "One of the key ways of doing it is by exploring measures aimed at increasing housing finance and improving access to finance for buyers; on the supply side, banks and mortgage finance firms need to better identify challenges and improve their ability to manage the associated risks." He added that the exuberant growth of the sector in pre-crisis times outpaced the institutional structure and sources of housing finance. "In particular, we did not have a mature, well developed mortgage market to support the sector. Now we feel that a Mortgage Finance Guarantee Agency should be established to maintain orderly conditions in the real estate markets, supporting and facilitating this key sector and developing standard eligible mortgages. Such an agency would be an effective bedrock for banking and financial housing finance institutions, enabling them to better manage risks. There also needs to be the legal and regulatory infrastructure to support mortgage-backed securities and a secondary market for mortgages," he said. Syed Farhan Fasihuddin, Housing Specialist of IFC Global Financial Markets, said: "Increasing the availability of affordable housing finance is critical for bringing about stability in housing prices - DIFC's Housing Finance Workshop is an excellent forum to have a practical discussion with stakeholders on how to do this." Source: Alrroya