Demand pushes prices of Ajman homes up

Ajman Free Zone, where residential buildings are still under construction in the old industrial area. The National
Residential property prices in Ajman may rise by between 30 and 40 per cent within six months, report property professionals who specialise in the northern emirate.
“Back in November, we were selling property at less than Dh400 per square foot,” said Khurram Burney, from Dubai-based Estate 400, which is developing five residential projects in Ajman. “Now prices are roughly Dh480 to Dh500 per square foot.”
Oxford Business Group (OBG), a research and publishing company, said the value of Ajman’s property market, based on transaction values, was Dh3.5 billion (US$953 million) in 2005.
In the third quarter of last year alone, OBG reported, Dh80bn of investment was announced.
Since then several more major projects have been announced, including the Dh3.5bn Eye of Ajman, Chapal World’s Dh2.5bn Flora Residences and Al Zorah, a Dh220bn master-planned city being developed by Solidere and the emirate’s government. One of the key factors driving Ajman’s property market has been affordability, as most developers in the emirate are focusing on middle-class investors who were priced out of Dubai and Abu Dhabi. “The freehold market of Dubai was only targeting a higher-net worth group – and more of them are investors than the actual end users,” said Salman Soofi, of Brooks Real Estate. “The Northern Emirates and especially Ajman are targeting end users who want to live in Sharjah and Ajman.”
Mr Burney said buyers were also helped by easier financing terms.
“A lot of investors are looking into this emirate, mainly because of the payment instalments and the prices. You put as little as five per cent down to book an apartment,” he said. This helped to make Ajman “a great potential market for developers”, he added.
Some developers were providing their own finance packages to offset a reluctance by many banks to provide mortgages in the Northern Emirates, said Tessa Morris, the marketing director of DSL Exhibitions, which has organised this week’s R&R Local Property Show.
“According to developers, many banks have been slow to recognise that [middle income] people can afford mortgages,” she said. “In Ajman you have interesting stage payments that make property buying affordable.”
The launch of the Sharia-compliant Ajman Bank was expected to provide further support to the property sector.
On the regulatory level, Ajman was expected to move “towards the establishment of escrow trust accounts for all off-plan sales”, said Aftab Hemani, of Dubai-based Cobalt Real Estate.
Ajman was the first emirate to provide freehold rights to foreign nationals, in 2004. As recent statistics released by the Ajman Chamber of Commerce & Industry showed, foreigners now own 33 per cent of development projects in the emirate.
This has elevated Ajman’s annual investment growth rate to an average of 6.7 per cent.
Source: The National