Timeshare to pep up Dubai’s property market
The introduction of timeshare property developments and the corresponding legislative framework to Dubai could bring back the city’s early days of property market frenzy, according to the world’s largest shared ownership company RCI.
RCI Middle East Managing Director Nick Turner argued the Dubai property market was becoming increasingly competitive and the days of dramatic profit returns for investors were fast disappearing.
Based on the company’s research, the introduction of timeshare property, a form of shared vacation property ownership, to the market in early 2008 would spark the return of the red-hot Dubai property market’s early days, he said.
Shared ownership
“For the first time, investors can incorporate various elements of use within their development including shared ownership,” he said.
Department of Economic Development Deputy Director-General for Executive Affairs Ali Ibrahim said Dubai had created an ideal platform for established destination marketers which had already led to significant international investment from both the tourism and real estate industry.
“In addition, we are also witnessing the birth of the local timeshare market with companies coming forward to set up timeshare projects in Dubai and the UAE,” Turner said.
“Given the current rate of growth of the tourism sector, we expect timeshare to soon become a very important segment of Dubai’s tourism development and contribute, in turn, to the growth of the economy.”
First opportunity
It will be the first opportunity for developers and investors to take advantage of timeshare property in Dubai although it has been available in other Middle East countries, including Egypt and Lebanon, for about 10 years.
About five million people own timeshare property worldwide and Turner said estimates put the potential value of the pending Dubai timeshare property market at $1.2billion by Middle East and international investment.
That would double with the inclusion of a secondary timeshare market - fractional timeshare property which is asset-linked and gives the client part ownership in a property and the possibility for re-sale of their share.
In a market that was escalating out of the reach of ordinary “mum and dad” investors, Turner said timeshare property would open up the market once again.
“Dubai is an appealing destination,” Turner said. “The market has become more competitive with many developers in the UAE and other GCC countries hopping on to the bandwagon.”
Turner said discussions had taken place with other GCC countries and about 30 developers were expected to commence projects incorporating timeshare which could comprise 30 per cent of the Dubai property market within 18 months.
Timeshare property previously carried with it concerns of illegal practices because of loopholes when it was first introduced in Europe and the Department of Economic Development has worked with international exchange companies to draft appropriate legislation.
Law for timeshare
“We are currently in the final stage of drafting the law for timeshare,” Ali Ibrahim said. “The purpose of the legislative framework is to regulate and standardise practices related to the timeshare business model in accordance with international standards.”
Ibrahim said the laws would ensure transparency of contracts.
“Our objective is also to generate awareness of issues related to timeshare practices and to safeguard consumer interests while permitting further growth in Dubai’s fast-growing shared ownership real estate and hospitality sectors,” he said.
Business guideines
“The authorities will, therefore, propose guidelines on the way vendors conduct their business, by examining their marketing methods, off-premises contacts, cancellation procedures, contracts and other issues relating to the industry’s business practices,” he added.
Turner said part of the attraction and the expected popularity of timeshare property to the Dubai market was the changing identity of Dubai investors to people making purchases based on their sentimental feelings towards Dubai.
“If you have to pay Dh3-4 million on a Dubai apartment it’s a higher risk,” he said. “But there’s less risk involved if you’re paying Dh200,000 for timeshare.”
Turner said the company’s research indicated that investors from the GCC would be greatly interested in the Dubai timeshare property because they have an attachment to the area, followed by the United Kingdom and northern Europe where the concept was widely accepted, and finally the Asian market.
The concept of fractional timeshare was expected to be particularly popular with GCC countries. “It’s an emotive purchase,” he said. “They’ve bought into the destination of Dubai.”
Ibrahim reinforced this by saying, “The concept of foreign vacations that include minimal changes in personal lifestyle choices is very attractive and will encourage people to travel abroad more often,” he said.
The regulatory structure and actual regulations will be finalised later this year and will probably involve several more meetings with the private sector before actual implementation. Source
RCI Middle East Managing Director Nick Turner argued the Dubai property market was becoming increasingly competitive and the days of dramatic profit returns for investors were fast disappearing.
Based on the company’s research, the introduction of timeshare property, a form of shared vacation property ownership, to the market in early 2008 would spark the return of the red-hot Dubai property market’s early days, he said.
Shared ownership
“For the first time, investors can incorporate various elements of use within their development including shared ownership,” he said.
Department of Economic Development Deputy Director-General for Executive Affairs Ali Ibrahim said Dubai had created an ideal platform for established destination marketers which had already led to significant international investment from both the tourism and real estate industry.
“In addition, we are also witnessing the birth of the local timeshare market with companies coming forward to set up timeshare projects in Dubai and the UAE,” Turner said.
“Given the current rate of growth of the tourism sector, we expect timeshare to soon become a very important segment of Dubai’s tourism development and contribute, in turn, to the growth of the economy.”
First opportunity
It will be the first opportunity for developers and investors to take advantage of timeshare property in Dubai although it has been available in other Middle East countries, including Egypt and Lebanon, for about 10 years.
About five million people own timeshare property worldwide and Turner said estimates put the potential value of the pending Dubai timeshare property market at $1.2billion by Middle East and international investment.
That would double with the inclusion of a secondary timeshare market - fractional timeshare property which is asset-linked and gives the client part ownership in a property and the possibility for re-sale of their share.
In a market that was escalating out of the reach of ordinary “mum and dad” investors, Turner said timeshare property would open up the market once again.
“Dubai is an appealing destination,” Turner said. “The market has become more competitive with many developers in the UAE and other GCC countries hopping on to the bandwagon.”
Turner said discussions had taken place with other GCC countries and about 30 developers were expected to commence projects incorporating timeshare which could comprise 30 per cent of the Dubai property market within 18 months.
Timeshare property previously carried with it concerns of illegal practices because of loopholes when it was first introduced in Europe and the Department of Economic Development has worked with international exchange companies to draft appropriate legislation.
Law for timeshare
“We are currently in the final stage of drafting the law for timeshare,” Ali Ibrahim said. “The purpose of the legislative framework is to regulate and standardise practices related to the timeshare business model in accordance with international standards.”
Ibrahim said the laws would ensure transparency of contracts.
“Our objective is also to generate awareness of issues related to timeshare practices and to safeguard consumer interests while permitting further growth in Dubai’s fast-growing shared ownership real estate and hospitality sectors,” he said.
Business guideines
“The authorities will, therefore, propose guidelines on the way vendors conduct their business, by examining their marketing methods, off-premises contacts, cancellation procedures, contracts and other issues relating to the industry’s business practices,” he added.
Turner said part of the attraction and the expected popularity of timeshare property to the Dubai market was the changing identity of Dubai investors to people making purchases based on their sentimental feelings towards Dubai.
“If you have to pay Dh3-4 million on a Dubai apartment it’s a higher risk,” he said. “But there’s less risk involved if you’re paying Dh200,000 for timeshare.”
Turner said the company’s research indicated that investors from the GCC would be greatly interested in the Dubai timeshare property because they have an attachment to the area, followed by the United Kingdom and northern Europe where the concept was widely accepted, and finally the Asian market.
The concept of fractional timeshare was expected to be particularly popular with GCC countries. “It’s an emotive purchase,” he said. “They’ve bought into the destination of Dubai.”
Ibrahim reinforced this by saying, “The concept of foreign vacations that include minimal changes in personal lifestyle choices is very attractive and will encourage people to travel abroad more often,” he said.
The regulatory structure and actual regulations will be finalised later this year and will probably involve several more meetings with the private sector before actual implementation. Source
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