How will the fire at The Address affect property prices in Dubai?
Nobody can be exactly sure how The Address fire on New Year’s 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.
At 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.
There will also have been some long-term damage to the reputation of Dubai high-rises as safe 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’s 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’s real estate cannot be overlooked either.
The 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.
Apartment 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.
Owners 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’s right to stay but does nothing to secure the landlord’s 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.
This 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.
Russian and Chinese buyers are thin on the ground. The US dollar-linked dirham is at a 12-year high 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.
Finally, 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.
Peter Cooper has been a senior business journalist in the Arabian Gulf for the past 20 years
business@thenational.ae
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Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
Killing of Qassem Suleimani
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Match info
Bournemouth 0
Liverpool 4 (Salah 25', 48', 76', Cook 68' OG)
Man of the match: Andrew Robertson (Liverpool)
The years Ramadan fell in May
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
The Bio
Favourite place in UAE: Al Rams pearling village
What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft
Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans
Best time to swim in the sea: When there is enough light to see beneath the surface
The biog
Name: Sari Al Zubaidi
Occupation: co-founder of Cafe di Rosati
Age: 42
Marital status: single
Favourite drink: drip coffee V60
Favourite destination: Bali, Indonesia
Favourite book: 100 Years of Solitude
Hurricanes 31-31 Lions
Wellington Hurricanes:
Tries: Gibbins, Laumape, Goosen, Fifita tries, Barrett
Conversions: Barrett (4)
Penalties: Barrett
British & Irish Lions:
Tries: Seymour (2), North
Conversions: Biggar (2)
Penalties: Biggar (4)
KILLING OF QASSEM SULEIMANI
Our Time Has Come
Alyssa Ayres, Oxford University Press
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Results
6.30pm: Maiden (TB) Dh82,500 (Dirt) 1,200m; Winner: Major Cinnamon, Fernando Jara, Mujeeb Rahman
7.05pm: Maiden (TB) Dh82,500 (D) 1,900m; Winner: Al Mureib, Fernando Jara, Ahmad bin Harmash
7.40pm: Handicap (TB) Dh102,500 (D) 2,000m; Winner: Remorse, Tadhg O’Shea, Satish Seemar
8.15pm: Conditions (TB) Dh120,000 (D) 1,600m; Winner: Meshakel, Xavier Ziani, Salem bin Ghadayer
8.50pm: Handicap (TB) Dh95,000 (D) 1,600m; Winner: Desert Peace, William Buick, Charlie Appleby
9.25pm: Handicap (TB) Dh87,500 (D) 1,400m; Winner: Sharamm, Ryan Curatlo, Satish Seemar
The five pillars of Islam
Killing of Qassem Suleimani
Brief scores:
Huesca 0
Real Madrid 1
Bale 8'
KILLING OF QASSEM SULEIMANI
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Five%20calorie-packed%20Ramadan%20drinks
%3Cp%3E%3Cstrong%3ERooh%20Afza%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20contains%20414%20calories%0D%3Cbr%3E%3Cstrong%3ETang%20orange%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20300%20calories%0D%3Cbr%3E%3Cstrong%3ECarob%20beverage%20mix%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20about%20300%20calories%0D%3Cbr%3E%3Cstrong%3EQamar%20Al%20Din%20apricot%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20saving%20contains%2061%20calories%0D%3Cbr%3E%3Cstrong%3EVimto%20fruit%20squash%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%2030%20calories%3C%2Fp%3E%0A
THE BIO
Favourite holiday destination: Whenever I have any free time I always go back to see my family in Caltra, Galway, it’s the only place I can properly relax.
Favourite film: The Way, starring Martin Sheen. It’s about the Camino de Santiago walk from France to Spain.
Personal motto: If something’s meant for you it won’t pass you by.
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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Director: Mohammed Saeed Harib
Stars: Shadi Alfons, Marwan Abdullah, Doaa Mostafa Ragab
Two stars out of five
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One in nine do not have enough to eat
Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.
One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.
The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.
Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.
It is currently estimated that one in nine people globally do not have enough to eat.
On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.
Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.
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