Dubai Forums Dubai Discussions Dubai General Chat

[sage & onion]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

[Nucleus]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

I want in PJA, thats where I'm looking now. But who knows maybe I go for this one. But this one depends, is it 2 bed, nice views, etc...

[sage & onion]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

I want in PJA, thats where I'm looking now. But who knows maybe I go for this one. But this one depends, is it 2 bed, nice views, etc...

I really can't understand all the hype for the palms, anyway pja is being shelved surely. The build quality on pj leaves a lot to be desired.

[Nucleus]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

I want in PJA, thats where I'm looking now. But who knows maybe I go for this one. But this one depends, is it 2 bed, nice views, etc...

I really can't understand all the hype for the palms, anyway pja is being shelved surely. The build quality on pj leaves a lot to be desired.

Thats the reason I'm looking for one at -25% on OP for PJA villa. -25% is after taking the risks into consideration and I want a villa on the beach.

[sage & onion]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

I want in PJA, thats where I'm looking now. But who knows maybe I go for this one. But this one depends, is it 2 bed, nice views, etc...

I really can't understand all the hype for the palms, anyway pja is being shelved surely. The build quality on pj leaves a lot to be desired.

Thats the reason I'm looking for one at -25% on OP for PJA villa. -25% is after taking the risks into consideration and I want a villa on the beach.

It's not a real beach, how long do you think it will last before the currents take all the sand away?

[Nucleus]

Just to highlight Sage's point. An apartment sale is listed today on their website for AED 645,000 for a 2000 sqft apartment in JBR. That's not buying and selling.

Where? That is good price for JBR.

You should go for it then

I want in PJA, thats where I'm looking now. But who knows maybe I go for this one. But this one depends, is it 2 bed, nice views, etc...

I really can't understand all the hype for the palms, anyway pja is being shelved surely. The build quality on pj leaves a lot to be desired.

Thats the reason I'm looking for one at -25% on OP for PJA villa. -25% is after taking the risks into consideration and I want a villa on the beach.

It's not a real beach, how long do you think it will last before the currents take all the sand away?

Anyway I'll pay for it @ -25%. For 4-bed it comes to AED 2.1m which is the correct price for it imo.

[RobbyG]

Pull out the wallet and preserve your piece of the Palm.

Would enjoy a few photo's after you bought it. We all love pics here.

GL.

[Nucleus]

Pull out the wallet and preserve your piece of the Palm.

Would enjoy a few photo's after you bought it. We all love pics here.

GL.

But nobody is selling at -25%. I just called somebody, he told me not to call him again.

[RobbyG]

Haha look at that.

He's probably deep down, with the bank on his neck.

[Nucleus]

I called couple of people: some were polite and said they will think about about; some hung up phone; some were simply rude, and one guy started cursing.

Here is how one conversation went:

Me: Hello, you advertised for PJA GH 4-bed villa.

Seller: Yea.

Me: I'll buy it @ -25% on OP.

Seller: Are you trying to be funny!

Me: No, this serious offer. I'll pay cash.

*Seller hangs up the phone*

[Nucleus]

I called couple of people: some were polite and said they will think about about it; some hung up phone; some were simply rude, and one guy started cursing.

Here is how one conversation went:

Me: Hello, you advertised for PJA GH 4-bed villa.

Seller: Yea.

Me: I'll buy it @ -25% on OP.

Seller: Are you trying to be funny!

Me: No, this serious offer. I'll pay cash.

*Seller hangs up the phone*

[RobbyG]

Great how you start your conversations straight to the tough point

I think you have more luck if you tried it with a slightly bit more flair.
May I show you an example:

You: Hello Sir, you advertised for PJA GH 4-bed villa. Is it still on sale?

Seller: Yeah

You: I did some thorough research about this particular market segment. Your current asking price is near 25 percent above current selling prices on the Palm (for this type of villa ) When do you think you want to sell?

Seller: As soon as the right buyer comes in!

You: Excuse me Sir, you probably meant, when the right lunatic comes in!

Seller: Are you kidding me?

You: No Sir, I'm dead serious, prices around you continue to fall. I recommend you do some research.

Seller: I won't sell below my asking price.

You: Goodluck then Sir, my offer is: -20 percent (say the numbers ) Do you want my phonenumber in case the market falls even further? My current offer is available for 7 days before revising. Have a nice day, Sir.

Seller: Grim rumbble razzlel growlllll


Get them really desperate and you'll find one that calls you back. I bet there's a few out there that fall for it. Especiall when a bank is drewling in their necks.
Give it another shot Nucleus and remember...be nice to them. Bit diplomatic and official works everytime

[Bora Bora]

The problem with the sellers is that they want to earn a cool million on a sale. Properties that went up six years ago when freehold was first announced were purchased at around 700,000 for a 3 bedroom. The villas originally purchased were probably rented out. Most properties were bought as investments. A couple of years ago they would have made a cool mil at the height of the market and easy access to loans/mortgages, but with property value dropping, more properties coming on the market because of people leaving, the profit they hope to realize will shrink. I remember when some developers were offering rock bottom prices and were throwing in a Mercedes.

I saw a beautiful spacious 3 bedroom on Palm Jumierah and the developer was asking 7 mil, with a 15% discount. I would never be able to sell it at the OP in 3 or 4 or even 5 years, would never ever make any money on it and without a doubt would take a big hit. Eventually my mortgage would would be higher than the value of the property.

I can understand wanting to make a profit, but a reasonable one.

[Habibi]

Eventually my mortgage would would be higher than the value of the property.

It's not necessarily a problem when you have a mortgage on minus equity, is it funny or does it feel good, no.

If you buy a house to live in, which should be the whole purpose (for flipping go to the stockmarket) it doesn't matter what the selling price is when you can easily pay the monthly bill and that bill stays the same for 25 years.

The real killer is that people get a highr mortgage than they can afford, plus a mortgage modell with a dynamic and unpredictable interest rates which kills them.

[Nucleus]

Thanks RG, I'll try it with your style.

Any body knows how much 4-bed PJ villas were initially launched in 2002/2003?

If 700,000 for 3 bed was initial price then prices can go down more since raw material costs have went down below 2002 levels.

Thanks

[Habibi]

I called couple of people: some were polite and said they will think about about; some hung up phone; some were simply rude, and one guy started cursing.

Here is how one conversation went:

Me: Hello, you advertised for PJA GH 4-bed villa.

Seller: Yea.

Me: I'll buy it @ -25% on OP.

Seller: Are you trying to be funny!

Me: No, this serious offer. I'll pay cash.

*Seller hangs up the phone*

If you have 2.1 mill in cash and these are your only live savings, why not take it easy and invest it low risk for 6-7% for a year or 2, or buy Gold, seems to me a better investment, especially with the rents going down now and no one knows what's going on in the market nor no one knows where and when this all will get better.

If these are not your live savings, yes, go ahead and take a gamble with property

[RobbyG]

From the heights of the market in 2007:
Garden Homes went up 203 percent and Signature villas went up 206 percent since 2002. Now you can tell us what the old prices were as you are familiar with the market

Since commodities have fallen below 2000 levels, its fair to say that prices purely depend on market demand.

Hows the demand thing doing? Any info on that?

[arniegang]

PJ villas were never sold for 700k even in 2002.

I bought two 1 bed shoreline appartments sea facing in May 2002 for 725k each.

Back then 4 bed villa's on the fronds started at around 1.6 million depending on spec

[RobbyG]

If the 40 percent drop is accurate, the prices should have come back to about: 2.5 million Dhs for a 4 bed villa on PJ.

looks reasonable. Maybe a perfect buy at ~2 mil?

[Nucleus]

I don't know about 2002/2003 market prices. I wasn't involved in real estate at that time.

Thanks Arnie.

In a bubble burst prices normally drop to their initial level right before bottom. So they have a good chance of going down to 1.6m.

but 2m has acceptable risk/reward ratio for me.

[RedKite]

Who says prices won't keep going DOWN until 2012 at least? A PHENOMENAL amount of property in Dubai and Abu Dhabi is due to be completed by 2012, so the market will be flooded. Yet the buyers have to come from the western world which is entering deep recession as private sector businesses close every week, and property keeps dropping in the USA, UK and Europe.

So, where are the BUYERS for a FAR GREATER VOLUME of properties going to come from?
Increase the supply PLUS Decrease the demand and what will you get? ........Even lower prices!!

Plus Gordon Brown is trying to convince other Govt leaders to abolish off-shore tax havens! He said it at the meeting of leaders last week.

The only advantage to that is that MAYBE some people who have fiddled tax in the USA, UK etc ,might flee Cayman Islands; Jersey ; Isle of Man et al with their loot and try and move to Dubai to live permanently. If Dubai is DESPERATE for their money, it might allow them in as residents .....no questions asked !!

Of course, Herve might say that it will prove a damn site more difficult to LEAVE [or Escape] from Dubai later with all monies intact!!

Again, the numbers of residents of tax havens coming to Dubai would be relatively small in number compared to the number of forthcoming properties in Dubai!!

[RedKite]

What is the exchange rate , Dirhams to Sterling and Sterling to Dirhams on March 15th 2009?

[RobbyG]

What is the exchange rate , Dirhams to Sterling and Sterling to Dirhams on March 15th 2009?

1 Dhs = 0.193 GBP (the inverse for 1 GBP)

With regards to the continued downward trend you speak of RK. It is possible that it stabilizes around 2012. But I think it could happen earlier and I will explain why...

Dubai basically has a temporary building stop for new projects. Projects under construction are either on hold (recent kickoffs) or being finished for delivery (final stage projects). Most of these latter projects are paid for so they are sold. Some properties have to go into sale due to high leverage. This puts pressure on the market a little further.

So I think we all agree that the market has enough properties for sale. But in recent years, especially during the boom, people with rising rents were moving to adjacent emirates like Sharjah and Ajman where prices were lower. Due to the lower construction appetite, these properties fall less than in Dubai in my opinion.
What you will see happening I think, is that people from sharjah and Ajman are slowly going to move to more affordable houses (buy and rent) in Dubai, avoiding the daily cummuter traffic congestion. So in the coming two years you'll going to see a lot of people moving in from surrounding emirates, giving demand a new impulse for early stabilization. In Sharjah and Ajman prices will also not rise but become more pressurized. Also early stabilization might be possible, or prolonged pressure (longer than Dubai) as those emirates are able (less financial leverage) to continue the progressive (slower) construction of proposed projects. When they will continue with new projects again, is a good question...

I think Dubai will benefit from an early recovery in the rent sector. The off-plan projects will stay down for some time, indeed maybe 2012 before recovery picks up again. Villa's are gone in notime. The Rich of the world have plenty of money after they've seen their balance sheets at the end of this year and start buying again in 2010.

I think this outline is a probable one.

[viking-warrior]

@Robbie

Well reasoned and in theory, true, but have you considered build quality, utilities such as sewage and electric, infrastructure. PJ will never come back to AED2Mill for a 4 bed villa nor will it be worth it, where it to be available at that price.

Personal issues with the country aside, I have first hand knowledge of the contruction process and the gaps between what you as a european expect to be fundamental and what actually happens in the field. I promise if you had a survey done on one of those houses in 5 years time the surveyor would not approve a mortgage against the property and with labourers getting $20 per day why would you expect anything more, those poor sods dont know why concrete needs a curing period nor why certain types of rebar are cheaper than others.

I hear lots of talk of new powerstation projects but precious little action - the whole emirate closed down in 2006 because of a single power cable short, and no amount of diesel gensets lined up on barges off the fronds will keep the A/C's running when PJ is fully occupied. Are you sure that the sewage system was upgraded when the number of houses increased? Care to wager 50 Euros, how about 500,000 Euros ? Thats is what I am talking about.

"How to decorate your bathroom brown" Yeuch I shudder at the thought.

The point that I would like to leave you with here is that you/we/I think like European/Westerners (yes France included) and make these assumptions but you are not dealing with a level playing field. No one is asking the real detail - all the focus is on the upside and a return to flipping for outrageous profits. There will be no route for complaint 4 years down the road, tough titty you bought it warts and all, now live with it.

[kanelli]

So nice to hear some honest comments about the build quality. The buildings will be falling apart within 5 years and the maintenance fees will be incredibly high.

[RobbyG]

Indeed Kanelli, Excellent post from VW !!

I merely pointed out a baseline scenario of the market sector on logic, but the inside information you contribute to this is of major importance for the demand issue. Indeed, like you said, I don't have a view on that. So thanks for adding.

At this point, I don't want to consider the brown bathrooms yet
But Nucleus might want to revise his thoughts on PJ villa's perhaps after reading VW post.

Can you tell us more about some of the anomalies you experience that are quality related? Why didn't we hear from you earlier on?

[BlackburnRovers]

Prices are as high or even higher than first world properties

Build quality is lower

Labor is much much cheaper

So where does the difference go? Probably to developers, where senior employees feel they are entitled to a 911, a Cayenne and a 745i at the same time !

[Red Chief]

Der Robbyg,
Yr. post shows one more time that you have never been to Dubai nor Ajman/Sharjah.

About Sharjah:
1) You can't buy property in Sharjah, only rent.
2) Rent charge has been also dropping there quite significantly...
3) There are barely no wealthy people. They are mostly clerks with salary 7K-10K and even those salary could easily squeesed by employer following rent...

So all your theory could concern only to RENT charges in IC, not Villa Prices in PJ...
Anyway RENT and PRICE are depend on each other very indirectly in the UAE.

Secondary you don't take into account the main problem in buying villa - problem with credits. All this buble on the property market was blown due to relatively cheap credits only evert where in the World. So as soon as credits haven't been available the prices will be drop more and more non-stop...

[macjul]

Quality and maintenance cost will be an increasing issue in the future.
For sure. Most building demand a high salary to live in them or cash payments. Question is: where are the buyers in the near future with enough
or income or both to come to Dubai to revitalize the property market?
I think in the future local companies will be much more careful with their hiring practices. Avoiding costly family expatriates, especially from the West,
will diminish further the pool of prospective buyers for properties.
The labor market will contract further and will not rebound the same way as it did in the past.

[Bora Bora]

PJ villas were never sold for 700k even in 2002.

I bought two 1 bed shoreline appartments sea facing in May 2002 for 725k each.

Back then 4 bed villa's on the fronds started at around 1.6 million depending on spec

The intro to freehold started in the Springs and that is where villas were sold at 700. PJ came much letter.