Dubai Forums Dubai Expat Forums Dubai Expat Help Forum

[arniegang]

Hi Jag

Good debate i agree with you. With regards the 99 year lease you mentioned, yes that was the case back before May 2002. Emaar's first phase which is the 5 towers on Marina Walk, Murjan Maesk etc were all sold initially on a 99 year lease.

People like myself walked in the sales centre and then very quickly walked out again. I believe the Shiek changed his mind because he soon realised that Westerner's would never consider purchasing property's on a 99 year lease.

I agree with you about Canada, i have a friend who bought in Whistler 5 years ago and has done really well with regard to rentals and increase in value. However, i thought you were referring to now, and now i believe the time is right in Dubai.

However, in saying this as in all property market booms what goes up will always eventually come down. I predict the market will slow down in late 2007, when the number of properties released/completed will flood the market with "re-sales". I also believe eventually supply will outstrip demand, it will be then that rents will in all probability drop substantially as investors will be competeing to rent out their properties.

I think there is very little time left now to make any money with property in Dubai , as i think we have passed the time between purchasing off plan and completion. People considering buying now for "investment" may possibly be dissappointed.

Jag, overall i think much confussion arises because there is a "grape vine" amonst the expats. I really do believe there is a level of reluctance to accept that Dubai has now "opened its doors". 3/4 years ago Dubai belonged to the elite group of expats, the rest of us had to pay £200 a night upwards. This will be no longer be the case very shortly.

Another reason i believe is there is a growing number of "private developers", and this has led to the introduction of "cowboys". The contracts are loosly worded and the finsih may not be what was advertised in the sales brochures. This was the sole reason i choose to buy my property through Emaar. Their contracts for sale are based on the English system and are very clear and legally watertight. I cannot speak for other developers.

[sniper420]

Hmm quite a debate. Well if I were an expat and had a choice to buy a property in Canada or Dubai, I would choose Canada because I can see or predict where I am after say 20 yrs but in the case of Dubai it's capricious cos first of all it's not democratic which means nobody can do anything when the shiekhs change the laws which can affect he value or the ownership of the land. Secondly, Dubai still earns substantial amount 30% through oil, most of them selling second hand parts and tourism, once the oil reserves are used up or demand for oil descreases (who knows somebody can come up with cheap alternative like hydrogen), then Dubai has to depend on something else like tax which can hit really hard on the expats cos majority do business here cos of tax-free environment. Frankly 1 out of 5 western investors agreed to invest in a politically volatile middle east region. Yes the point and resons arn and Jag stated were really informative and gave a view of the real estate business in Dubai.

[Chocoholic]

Hm OK some good points raised and no disrespect taken. But I've looked into the propery market here quite a bit, there was a recent big article slating several of the big construction companies for the finishes on their properties, particularly in the Spings/moeadows area and the Greens Community. If you pay 2 million dirhams for a place, the finish better be darn good. Plus some friends who've bought told me they felt like guineapigs as they constantly had problems and applicances were always having to be replaced.

Currently in the UAE constitution no where does it say that expats are allowed to own property. Yes you have it on a leasehold basis, but this obviously causes problems for mortages as banks want deeds to properties, which you can't provide. Plus you know what it's like in this country, if you own the bricks and mortar of a villa for example, but don't own the land, there is absolutely nothing stopping the land owner bulldozing it and slapping up a tower block - of course more revenue for him.

I'm well aware how the house market in the UK differs, having been in it for years and there are some good oppotunities for property buying here, but the basic things you need are still missing.

Good on you if you've had a good experience, many people certainly haven't and have wondered what on earth they've got themselves into. You also have to remember that the guys building here are unskilled cheap labour, everything goes up at a phenomenal rate and you have to wonder how safe it all can be in that respect.

With regard to rents, obviously you expect rents to go up, but in every other market there is a top percentage by which they can go up. Now the landlords excuse that it's inline with international market values is total rubbish. To put someone's rent up by 50 - 100% annually or even six monthly is not good. I think it's good that the authorities have capped it at 15% although this can still be horrendous, not necessarily for westerners who tend to earn more, but what about the lower wage people, how can they afford it?

Plus you also have to remember that in the UAE people don't get annual pay rises to compensate for everything else going up. Take me, I 've been here 2 and a half years, no pay rise, no paid holiday, no flight tickets as yet!

You can't really compare this market to any other as it's a law unto itself.

[hashman]

very informative forum! Thinking of investing here.

[arniegang]

Hm OK some good points raised and no disrespect taken. But I've looked into the propery market here quite a bit, there was a recent big article slating several of the big construction companies for the finishes on their properties, particularly in the Spings/moeadows area and the Greens Community. If you pay 2 million dirhams for a place, the finish better be darn good. Plus some friends who've bought told me they felt like guineapigs as they constantly had problems and applicances were always having to be replaced.

Currently in the UAE constitution no where does it say that expats are allowed to own property. Yes you have it on a leasehold basis, but this obviously causes problems for mortages as banks want deeds to properties, which you can't provide. Plus you know what it's like in this country, if you own the bricks and mortar of a villa for example, but don't own the land, there is absolutely nothing stopping the land owner bulldozing it and slapping up a tower block - of course more revenue for him.

I'm well aware how the house market in the UK differs, having been in it for years and there are some good oppotunities for property buying here, but the basic things you need are still missing.

Good on you if you've had a good experience, many people certainly haven't and have wondered what on earth they've got themselves into. You also have to remember that the guys building here are unskilled cheap labour, everything goes up at a phenomenal rate and you have to wonder how safe it all can be in that respect.

With regard to rents, obviously you expect rents to go up, but in every other market there is a top percentage by which they can go up. Now the landlords excuse that it's inline with international market values is total rubbish. To put someone's rent up by 50 - 100% annually or even six monthly is not good. I think it's good that the authorities have capped it at 15% although this can still be horrendous, not necessarily for westerners who tend to earn more, but what about the lower wage people, how can they afford it?

Plus you also have to remember that in the UAE people don't get annual pay rises to compensate for everything else going up. Take me, I 've been here 2 and a half years, no pay rise, no paid holiday, no flight tickets as yet!

You can't really compare this market to any other as it's a law unto itself.

Choc

I'm sorry to say, you are quite incorrect on many of your points. firstly i own my property. There is no "leasehold" in my case. We own the "freehold". Currently on all properties built and sold by Emaar and Nakheel, becasue they are part funded by the government they actually own the land on which their properties are built. Our contracts allow for the transfer of the freehold from the developer to the owner WHEN the new "freehold law" comes into effect later in 2006.

This is the reason why no owner in dubai currently has any "deeds". The developer currently hold the deeds. However when the freehold law is created, there will be a "property register" created like the Land Registry in the UK. Our contracts are quite clear in that when this happens the "title" of the property will transfer to the owner and then entered as such on the new Dubai Land Register.

I also disagree with regard to rents. Property and rents will rise in line with the current market conditions. Unfortunately in dubai, there has been not only a unpresidented property boom, but more importantly since 2003/4 there was basiscally no Property Market at all. In my humble opinion, rents were "artificially low" prior to the existance of the law that was passed to allow certain foreigners to own property in dubai in 2002.

I appreciate and respect your and others like you opinion because at the end of the day expats whoose companies do not supply housing or rent allowances are now suffering the "rent hike situation". but at the end of the day thats life in a fast moving and growing economy.

And with the utmost of respect Choc, its no good bleating about your working conditions of no pay rises, no holiday, no flights. At the end of the day that really is your choice. You knew this when you took up your employment. What has changed is Dubai itself, and i'm affraid your employment situation has not altered to take account for this. Dubai is no different to any other employment market in the world. If you dont like your employment conditions then move on. I know this sounds harsh but that is the reality i'm affraid Choc.

With regard to your friends that "felt like guineapigs". Well if they buy a property that is too small for them or on a development that is like "toy town" , then really that is their own issue and has nothing to do with the developer or the builder. With regard to appliances - well they do break down, in Dubai and every other city in the world. The average life of a dishwasher or washing machine used daily is only 3 years. If they live in the Meadows or springs then i would imagine its time to think about replacing them.

With regard contruction - well Atkins are the consulting engineers on most of the large developments in Dubai. Atkins is the largest Civil Engineers and are from the UK. Atkins were the Engineers who built the Burj El Arab, the Jumeira Beach hotel, and the Petrona Towers. I am very pleased that a very well respect UK civil engineering company were the engineers who built my appartment tower

Also for those that only listen to others in their "own circles". All Emaar and Nakheeel properties come with a 10 year guarantee simialar to our NHBC system in the UK.

Please dont take this personally Choc, i am merely trying to give you an alternative opinion/viewpoint. I can assure you before i spent £120,000 i did my homework and i know what i have bought.

[sniper420]

yes u really did ur homework. gj

[arniegang]

yes u really did ur homework. gj

Thank you sniper, yes i did my my homework, and i'm sucessful because of this.

Unlike a lot of the "old time expats", who thought all this construction was a "flash in the pan" and all thought ewwww this will go wrong" and are still winging about it, some of us, in fact A LOT OF US actually got money out of our pockets.

Take for example Choc's comments. At the end of the day, if she and others like her had walked into the Emaar sales office in 2002 and put down as in my case 65,600 Dhs, then borrowed the money for completion in April 2005, they could have made themselves 350,000 Dhs.

Now had they spent less time thinking all this property stuff is crap, and thought about it and done what i had done, do you think thaey would be compalining about crappy washing machines and poor construction now with 350.000 Dhs in their bank account. I think not.

Another important point to note Sniper, is that the Expats who came to Dubai in the late 90's early 2000's and probably sold their homes and came to the land of plenty, have probably shot themselves well and truely in the foot.

The average house price in the UK has risen from £77,000 in 1998 to £186,000 in 2005. On the basis they all came to Dubai to earn a lot of "tax free" money live the good life and save for the day they will go home, sadly they have made one huge mistake.

An expat who will want to come home and buy a house, would now have had to SAVED on average the equiv of 130,000 Dhs per year to just re-purchase the house they sold to come to Dubai.

To make matters even worse, they have now even missed out on the property boom in Dubai.

And to add insult to injury, it is really ironic that over a quater of a million investors and increasing by the day all think dubai is a good investment. A few hundred expats think they know better. I think not

[sniper420]

Agreed but one has to know the forces of demand and supply to really predict and think ahead i.e you need to have some experience in real estate business to know nitty gritty of buying and selling which I guess you are knowlegable. But one last thing- yah you can never really correctly predict the property prices say like 3 or 5 yrs from now cos the price depends on so many factors of the economy. I guess the expats who didnt invest in the property thought investing in Dubai is risky cos of politically volatile region or thought the property prices have reached it's peak and will fall down. I love the "laissez faire" policy only when I make profit.

[arniegang]

Agreed but one has to know the forces of demand and supply to really predict and think ahead i.e you need to have some experience in real estate business to know nitty gritty of buying and selling which I guess you are knowlegable. But one last thing- yah you can never really correctly predict the property prices say like 3 or 5 yrs from now cos the price depends on so many factors of the economy. I guess the expats who didnt invest in the property thought investing in Dubai is risky cos of politically volatile region or thought the property prices have reached it's peak and will fall down. I love the "laissez faire" policy only when I make profit.

I totally agree with you Sniper. But in the UK, we have been buying and selling property for centuries.

The reason i believe the Brit Expats didnt in the main, buy was because they didnt have the foresight or actually had enough money to actually put deposits down.

Its all very well earning 150,000 - 200,00Dhs a year, but it isnt enough to make money on property after deducting living expenses. I can make that on just one deal in the UK.

I truely believe a lot of Expats bad mouth people like me and our properties is because they are to some extent just jealous. I dont mean everyone obviously.

[sniper420]

Agreed but one has to know the forces of demand and supply to really predict and think ahead i.e you need to have some experience in real estate business to know nitty gritty of buying and selling which I guess you are knowlegable. But one last thing- yah you can never really correctly predict the property prices say like 3 or 5 yrs from now cos the price depends on so many factors of the economy. I guess the expats who didnt invest in the property thought investing in Dubai is risky cos of politically volatile region or thought the property prices have reached it's peak and will fall down. I love the "laissez faire" policy only when I make profit.

I totally agree with you Sniper. But in the UK, we have been buying and selling property for centuries.

The reason i believe the Brit Expats didnt in the main, buy was because they didnt have the foresight or actually had enough money to actually put deposits down.

Its all very well earning 150,000 - 200,00Dhs a year, but it isnt enough to make money on property after deducting living expenses. I can make that on just one deal in the UK.

I truely believe a lot of Expats bad mouth people like me and our properties is because they are to some extent just jealous. I dont mean everyone obviously.

kekeke jealous cos they killed the goose that layed golden eggs and u have urs ALIVE ! Yeah u bet they are!

[onetickin]

I've paid the first installment on a 1 bedroom apartment in the marina, and I don't even live there. I will be moving out to Dubai in the coming months, so I'm taking a risk.

There is risk in every investment or business. You'll get people spending all day talking about the dangers of this and that, and you'll tend to find they are the ones that have missed the boat.

House prices might even go down in the next 1, 2, 3 or even 4 years. But, in all markets after 5 years, there is only one direction. And the potential is a lot more than what most people have earn in their day jobs.

[ArifN]

In my case arnie it was not having the money at the time to pay the 25% installmens every few months, and then having to wait few years for any return
I was fortunate enough to use the money I had to buy a couple of £15k two bedroom houses, recieving rent straight away and now the value has increased by 400%, probably the same as people like yourself would make on your apartments(deposit amounts), so I missed the boat in dubai but made up in uk,
there are people who are probably jealous ,or just feel unlucky like myself who didnt and dont have the funds for large invetment, but whatever is meant to be will be,
BTW are you living in Dubai or UK ,from the post you always refer to here in UK so assumd you are here(uk),
what you think for house market in 2006 in uk???

[arniegang]

In my case arnie it was not having the money at the time to pay the 25% installmens every few months, and then having to wait few years for any return
I was fortunate enough to use the money I had to buy a couple of £15k two bedroom houses, recieving rent straight away and now the value has increased by 400%, probably the same as people like yourself would make on your apartments(deposit amounts), so I missed the boat in dubai but made up in uk,
there are people who are probably jealous ,or just feel unlucky like myself who didnt and dont have the funds for large invetment, but whatever is meant to be will be,
BTW are you living in Dubai or UK ,from the post you always refer to here in UK so assumd you are here(uk),
what you think for house market in 2006 in uk???

Hi ArifN

First off i must apologise if i seem "anti expat", if i do, please accept it is not meant that way.

First off, no i do not live in Dubai. Yes i have property there, but i use it purely as a holiday home. I was there for 2 weeks in December and will be back next month.

I have got "residency" which i completed in September, and when i was over last month i bought myself a Jeep Cherokee yippeeeeeeee no more Dubai Taxis lol.

The housing market in the UK at the moment ArifN is pretty well in the doldrums. The market has been stagnent now for the best part of 9 months. The work on the street is that the Bank of England will reduce the base rate by 1/4% in Feb or March. Personally i dont feel this will make enough different to make the market "pick up".

The main issue here now, is the problems faced by the "first time buyer" market. This is the main problem we have here that now has had a clear "knock on " effect experianced in our market.

Basically the price of houses at the lower end is so high, it is making it difficult for the youngsters to actually get on the housing ladder. This in turn has caused the knock on effect upwards, and the market is basically dead.

I really do not forsee this changing in the short term. the average cheaper end starter home in say the "home counties" and london is nearing £150-200k. For a younger couple to borrow that amount they would need a combined income of roughly £60k.

My personal opinion and please dont quote me is that the market needs to shift downwards, before it picks up again.

All i would say ArifN is that in the early years of the propery boom in Dubai 2002, Emaar and the like were only asking for 10% deposit. It is the "private" developers that increased the deposit margins.

[RobbyG]

Hi Jag

Good debate i agree with you. With regards the 99 year lease you mentioned, yes that was the case back before May 2002. Emaar's first phase which is the 5 towers on Marina Walk, Murjan Maesk etc were all sold initially on a 99 year lease.

People like myself walked in the sales centre and then very quickly walked out again. I believe the Shiek changed his mind because he soon realised that Westerner's would never consider purchasing property's on a 99 year lease.

I agree with you about Canada, i have a friend who bought in Whistler 5 years ago and has done really well with regard to rentals and increase in value. However, i thought you were referring to now, and now i believe the time is right in Dubai.

However, in saying this as in all property market booms what goes up will always eventually come down. I predict the market will slow down in late 2007, when the number of properties released/completed will flood the market with "re-sales". I also believe eventually supply will outstrip demand, it will be then that rents will in all probability drop substantially as investors will be competeing to rent out their properties.

I think there is very little time left now to make any money with property in Dubai , as i think we have passed the time between purchasing off plan and completion. People considering buying now for "investment" may possibly be dissappointed.

Jag, overall i think much confussion arises because there is a "grape vine" amonst the expats. I really do believe there is a level of reluctance to accept that Dubai has now "opened its doors". 3/4 years ago Dubai belonged to the elite group of expats, the rest of us had to pay £200 a night upwards. This will be no longer be the case very shortly.

Another reason i believe is there is a growing number of "private developers", and this has led to the introduction of "cowboys". The contracts are loosly worded and the finsih may not be what was advertised in the sales brochures. This was the sole reason i choose to buy my property through Emaar. Their contracts for sale are based on the English system and are very clear and legally watertight. I cannot speak for other developers.

Arnie,

I didn't know you were a rich fooker.
Anyway, thanks for all the info you supplied us with. At that time of writing this, you accurately predicted the property peak!

You're on my shortlist for DF most wisest saga's. No onions allowed.

brgds.