Villa Prices Fall By Up To 45%

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Mar 17, 2009
Thanks for the positive response. I honestly thought everyone knew of the issues around the planning and the expansion and ultimately the build quality in and around Dubai.

The issue as a number of you have pointed out is now repeat business - where is this money going to come from. RK has hinted at "Grey" funds and the government has already implimented an "offshore Dubai company status" for just that purpose, but I feel that even that cash is a bit wary and 2012 might be a tad optimistic for a true recovery to filter through to what now has to be considered a part of the global real estate market.

Nakheel are talking about launching REIT's , heh heh good luck with that - there are quality REIT's to be has at about 76% discount in the US at the moment so that does not bode well for that attempt at capital raising - please, its selling your assets at the bottom of the market. Whose business model does that conform to!

viking-warrior
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Mar 17, 2009
I presume Nakheel, Emaar or any other large developer and govt bothered to study real estate bubbles in US, UK, and Japan. They seem to be making same bloody mistakes. Nahkeel's REIT will be interesting :lol:

As for factoring in build quality and maintenance that is a question mark, because there is nothing to compare too for an economic model. In financial models it can be assumed market taken somethings into consideration like for example, if model is expecting the prices to return to initial phase then you can take off-plan price for similar property in initial phase as reasonable comparison under the assumption that market had factored risks with off plan property in that price. Likewise, prices for similar completed property would be higher than off-plan since it doesn't have default risk from the developer.

With maintenance and build quality, market assumption is difficult one because market was not in initial phase when these properties came into market. There is nothing similar available with similar factors for completed properties in the initial phase.
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Mar 17, 2009
Its the quality of the studies and the ability of those concerned to qualify the components that is of concern.

Agree, the comparibles are very difficult to factor in but the assumption is always made - biggest, best, ......... AAA+ so the risk is in the differential between fantasy and reality and it is time that is the critical element from an investors perspective - the rate of decay over time (theta) may be more accelerated than in other locations, undermining the longevity of any such REIT. What may offer a short term gain could well turn into a depreciating asset in record time. (sound familiar)

Come in PJA your time is up. (smirks to self)

:)
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Mar 17, 2009
Red Chief wrote: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...


Funny guy. Before you even think of being serious, go research the market before you crack anyone again like that.

You only talk about Sharjah, so lets keep it 'in your alley' for instance;
1. Surely you are able to buy property in Sharjah. Ask the local real estate brokerage.
2. Like I said, prices are under pressure (downwards pressure that is ;))
3. Wealthy people buy on a Palm or at least live in a luxury appartment or villa. I'm not only talking about local riches.

People with 20 million dollars and more don't have much limitations in this world. They can buy it now, or in a year, but after losing lots of equity and bond value recently, the riches of this world probably want to see their balance books before buying 130m yachts and 5Mil Dhs villa's again. Its not that hard to imagine.

It is not worth reminding people (in my opinion) the huge deleveraging process that has happened from August 2008 and onwards. This will continue. Like RK said, the Brits don't have much buying power left and American's aren't even able to keep their own houses...let alone a Dubai property.
Like I said earlier, its not the time to talk about recovery. Its about stabilization. Prices remain under pressure. Again, downwards pressure, not upward pressure!! :lol:

Anyway, you might want to apologize, as I have been typing way to long for you by now. :lol: :wink: :lol:

Do some proper research or ask Arnie. He knows what I'm talking about.
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Mar 17, 2009
There are, as far as I can find, two freehold properties in Sharjah.

Sharjah Gate and Abbco Building.

To say that it is a haven for clerical employees is totally wrong. I know several people who live in Sharjah and do well salary wise. These couples have 3 or 4 children so rents were affordable to them as they had schooling costs to cover.
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Mar 17, 2009
On second thought it might be too risky. Florida RE bubble, interesting read:


The Florida land boom of the 1920s was Florida's first real estate bubble, which burst in 1925, leaving behind entire new cities and the remains of failed development projects such as Isola di Lolando in north Biscayne Bay. The preceding land boom shaped Florida's future for decades and created entire new cities out of the Everglades land that remain today. The story includes many parallels to the modern real estate boom, including the forces of outside speculators, easy credit access for buyers, and rapidly-appreciating property values.

By the 1920s, its economic prosperity had set the conditions for a real estate bubble in Florida. Miami had an image as a tropical paradise and outside investors across the United States began taking an interest in Miami real estate. Due in part to the publicity talents of audacious developers like Carl G. Fisher of Miami Beach, famous for purchasing a huge lighted billboard in New York's Times Square proclaiming “It's June In Miami”,[1] property prices rose rapidly on speculation and a land and development boom ensued.[2]

By January 1925, investors were beginning to read negative press about Florida investments. Forbes magazine warned that Florida land prices were based solely upon the expectation of finding a customer, not upon any reality of land value.[3] New York bankers[who?] and the IRS both began to scrutinize the Florida real estate boom as a giant sham operation. Speculators intent on flipping properties at huge profits began to have a difficult time finding new buyers. The inevitable bursting of the real estate bubble had begun.

On January 10, 1926, the Prinz Valdemar, a 241-foot, steel-hulled schooner, sank in the mouth of the turning basin of Miami harbor. The old Danish warship had been on its way to becoming a floating hotel.[4]

The Prinz Valdemar, capsized and blocked the port of Miami for several weeks in January of 1926, helping to usher in the end of the real estate boom.

The railroads, already strained by the burden of transporting both food and building supplies, had already begun raising shipping rates. When the sea route to Miami was blocked the city's image as a tropical paradise began to crumble. In his book Miami Millions, Kenneth Ballinger wrote that the Prinz Valdemar capsize incident saved a lot of people a lot of money by revealing cracks in the Miami façade. “In the enforced lull which accompanied the efforts to unstopper the Miami Harbor,” he wrote, “many a shipper in the North and many a builder in the South got a better grasp of what was actually taking place here.”[5]

In October 1925, in an effort to improve Florida's clogged rail system, the railroad companies placed an embargo on all railway goods other than food, which further contributed to Florida's skyrocketing cost of living. New buyers failed to arrive, and the property price escalation that fueled the land boom stopped. The days of Miami properties being bought and sold at auction as many as ten times in one day were over. The first Florida real estate bubble had burst.

The next year brought the 1926 Miami Hurricane, which drove audacious Biscayne Bay development projects such as Isola di Lolando into bankruptcy. The 1928 Okeechobee Hurricane and the Wall Street Crash of 1929 continued the catastrophic downward economic trend, and the Florida land boom was officially over as the Great Depression began. The depression and the devastating arrival of the Mediterranean fruit fly a year later destroyed both the tourist and citrus industries upon which Florida depended. In a few short years, an idyllic tropical paradise had been transformed into a bleak, humid remote area with few economic prospects. Florida's economy would not recover until World War II.

http://en.wikipedia.org/wiki/Florida_la ... _the_1920s
Nucleus
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Mar 17, 2009
Bora Bora wrote:There are, as far as I can find, two freehold properties in Sharjah.

Sharjah Gate and Abbco Building.

To say that it is a haven for clerical employees is totally wrong. I know several people who live in Sharjah and do well salary wise. These couples have 3 or 4 children so rents were affordable to them as they had schooling costs to cover.


Have you ever heard of demographic research?

Enough said.
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Mar 17, 2009
Bora Bora wrote:There are, as far as I can find, two freehold properties in Sharjah.

Sharjah Gate and Abbco Building.


There are probably. The only problem that there is NO law for free-hold for expats in Sharjah.
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Mar 17, 2009
Red Chief wrote:
Bora Bora wrote:There are, as far as I can find, two freehold properties in Sharjah.

Sharjah Gate and Abbco Building.


There are probably. The only problem that there is NO law for free-hold for expats in Sharjah.


What do you think freehold is?
Bora Bora
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Mar 17, 2009
I thought something like ownership for 99 years...
Red Chief
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Mar 17, 2009
Red Chief wrote:I thought something like ownership for 99 years...


Thats leasehold my bloody Chief

edit: to be overly clear...

Sharjah doesn't allow foreigners to buy free-hold.
All properties can be rented or bought! on leasehold contracts which last for 99 years.

Can't make it any clearer than that.
And Red Chief, next time, dont scream what you don't know about...

Thnx
RobbyG
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Mar 17, 2009
Thank you, Bob. I appreciate all your theories very much... Are you happy?

Why don't you drop the smart-arse habbit permanetly edit your message changing a few times the meaning. If you blame somebody could you insert a reference on Sharjah gov. that confirm your point...

Will not continue to save this important thread...
Red Chief
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Mar 17, 2009
Red Chief wrote:Thank you, Bob. I appreciate all your theories very much... Are you happy?

Will not continue to save this important thread...


You and I both know you don't have to clap for me.
Its simply having a bit of respect for eachother as I have for your outlines.

Keep it up and no personal attacks anymore please. Keep it on substance
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Mar 17, 2009
Red Chief
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Mar 17, 2009
Is that to say the govt established freehold apartments to allow only Emiratis to buy them, whereas freehold in Dubai was established for both Emiratis and expats.
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Mar 17, 2009
RobbyG wrote:Keep it up and no personal attacks anymore please. Keep it on substance


You hypocrite! Do you think you have the exclusive rights on personal attacks?
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Mar 17, 2009
Red Chief wrote:http://www.dubainews.biz/Sharjah-freehold-law-awaiting.html


This mentions the proposed property law for Arab nationals, most recognizably the GCC nationals. This could exclude the non-GCC nationals from freehold opportunities which would make it racist in my opinion. This will be short-lived it that was the case.

I think they will open up just like Dubai and Abu Dhabi with freehold property licenses for all foreigners.

Until now they haven't decided yet, so its a pain in the Arab @ss so to speak. :lol:
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Mar 17, 2009
Bora Bora wrote:
RobbyG wrote:Keep it up and no personal attacks anymore please. Keep it on substance


You hypocrite! Do you think you have the exclusive rights on personal attacks?


An eye for an eye, you 'non-substance' caveman.

You try being reasonable without getting offensive and assumptive. You can make fun of me for sure!!! Life is fun.
RobbyG
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Mar 17, 2009
RobbyG wrote:
Bora Bora wrote:
RobbyG wrote:Keep it up and no personal attacks anymore please. Keep it on substance


You hypocrite! Do you think you have the exclusive rights on personal attacks?


An eye for an eye, you 'non-substance' caveman.

You try being reasonable without getting offensive and assumptive. You can make fun of me for sure!!! Life is fun.


I'm sorry, but is that a personal attack? You just don't have any class do you?
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Mar 17, 2009
RobbyG wrote:
Red Chief wrote:http://www.dubainews.biz/Sharjah-freehold-law-awaiting.html


This mentions the proposed property law for Arab nationals, most recognizably the GCC nationals. This could exclude the non-GCC nationals from freehold opportunities which would make it racist in my opinion. This will be short-lived it that was the case.

I think they will open up just like Dubai and Abu Dhabi with freehold property licenses for all foreigners.

Until now they haven't decided yet, so its a pain in the Arab @ss so to speak. :lol:


The further north u go in the Emirates , the more frequently the laws change! Intially they offered long term visas, now that has been revoked....
The proposed property law for Arabs, was in my opinion simply because credit was easily available to them, and for Arab/local/Gcc? developers there was no cap on the amount they could borrow....
Besides the further north u go , the propensity of shady developers from pakistan, India, Russia etc increases!
So how is the real estate in sharjah doin rit now?
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Mar 17, 2009
RedKite wrote: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!!


Well said redkite! Thats the real fear! They better come up with some strong anti money laundering laws real soon.........Or else the fallout of the GCC markets could spread to other parts of Asia as well, like Pakistan, India etc considering that there are so many diverse nationalities doin business here!
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Mar 17, 2009
RedKite wrote: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!!


And i guess we can all silently agree that Herve may very well be right here!
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Mar 17, 2009
Misery Called Life wrote:
RedKite wrote: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!!


And i guess we can all silently agree that Herve may very well be right here!


Sure he has a strong point for discussion.

But remember, after the doom and gloom comes the fruit of the loom ;)

hahaha :lol:
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Mar 17, 2009
Bora Bora wrote:Is that to say the govt established freehold apartments to allow only Emiratis to buy them, whereas freehold in Dubai was established for both Emiratis and expats.


That's right although there were a lot of ads on nearly built skyscrapers about freehold everywhere in Sharjah a year or two ago.

Even a year ago HSBC offered loans for Dubai's and Ajman's freehold, not Sharjah's one.

Sharjah gov. explained their point of view a few times in local media: they offers leasehold (only for land) for 30 years to developers, not for flats or villas to people...
Red Chief
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Mar 17, 2009
Bora Bora wrote:
arniegang wrote: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.


correction, the into to freehold started in Marina Phase 2. The Springs was partly completed then i agree, as was Marina Phase 1 (marina walk)

at this point though you could only buy in Springs and Marina at 99 year leasehold. Emaar changed their sales contracts in May.

Nakheel's first off plan reservations at Palm J commenced in June 2002.
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Mar 18, 2009
Arniegang,
I know I am generalising, but how much is an AVERAGE apartment in STERLING in Marina 1 ...NOW , on March 17th 2009 and how much was the SAME ,or similar, apartment on March 17th 2007 ?

How much of the difference is attributable to the fall in the value of Sterling?
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Mar 18, 2009
RedKite wrote:Arniegang,
I know I am generalising, but how much is an AVERAGE apartment in STERLING in Marina 1 ...NOW , on March 17th 2009 and how much was the SAME ,or similar, apartment on March 17th 2007 ?

How much of the difference is attributable to the fall in the value of Sterling?


I guess you're not really an arithmatic wonderchild now are ya?

;)
RobbyG
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Mar 18, 2009
RedKite wrote:Arniegang,
I know I am generalising, but how much is an AVERAGE apartment in STERLING in Marina 1 ...NOW , on March 17th 2009 and how much was the SAME ,or similar, apartment on March 17th 2007 ?

How much of the difference is attributable to the fall in the value of Sterling?


You can research this easily enough by going through the following website:

http://www.gnads4u.com/properties

Exchange rate 5.15
sage & onion
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Mar 18, 2009
Robby, not sure if you were talking to me or VW earlier. My experience of bad build quality came from a Springs villa. We were the first occupants. When drilling holes for the curtain rods we found large air pockets in the concrete, because the drill just sank into the wall. I had to fill in order to fasten the screws. Some months later my skinny, light cat decided to walk across the curtain rod and a large chunk of concrete came out of the wall where the curtain rod was fixed. The tiles on the floor could chip if you even dropped a small sugar spoon. The water drain was place in the wrong spot on the balcony, so when it did rain or we washed the balcony I had to squeegee a large puddle of water to the drain. Outside of our villa the guys who did the street put the drain on the upward sloping side, not the downward sloping side, so we constantly had a puddle of water out front from everyone washing their cars, and we had flooding out front when it did rain. Water leaked into our sliding doors and front door when we had rain. The water pump was faulty. The water heater in spare room was faulty. The toilet seat fixtures were faulty and needed to be adjusted all the time. Our neighbours had to dig up their driveway because the water tank leaked. Floor tiles were uneven, and the grout was three or four different shades of brown in the same room - guess they got sand and dirt in the grout and just applied it as is. This is all I can think of at the moment.
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Mar 18, 2009
kanelli wrote:Robby, not sure if you were talking to me or VW earlier. My experience of bad build quality came from a Springs villa. We were the first occupants. When drilling holes for the curtain rods we found large air pockets in the concrete, because the drill just sank into the wall. I had to fill in order to fasten the screws. Some months later my skinny, light cat decided to walk across the curtain rod and a large chunk of concrete came out of the wall where the curtain rod was fixed. The tiles on the floor could chip if you even dropped a small sugar spoon. The water drain was place in the wrong spot on the balcony, so when it did rain or we washed the balcony I had to squeegee a large puddle of water to the drain. Outside of our villa the guys who did the street put the drain on the upward sloping side, not the downward sloping side, so we constantly had a puddle of water out front from everyone washing their cars, and we had flooding out front when it did rain. Water leaked into our sliding doors and front door when we had rain. The water pump was faulty. The water heater in spare room was faulty. The toilet seat fixtures were faulty and needed to be adjusted all the time. Our neighbours had to dig up their driveway because the water tank leaked. Floor tiles were uneven, and the grout was three or four different shades of brown in the same room - guess they got sand and dirt in the grout and just applied it as is. This is all I can think of at the moment.


That sounds like very shoddy construction, I am glad that I have not had such experiences where I live.
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