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Real Estate in 2008 - Good Time to Buy?


maximusprime to be honest, i think its a bit risky now. Rule number one in my book is if you haven't been here to see for yourself do not under any circumstances buy anything. Come to Dubai, do your homework, choose a good property that you feel is worth the price. These days prices are sky high and there are tons of empty apartments. The situation can only last so long. If you buy in a good area you may be ok but if you buy the wrong place at the wrong price you will likely lose your ass. mortgages depend on what you buy. If you buy offplan direct from the developer, you will pay about 5-10% initially and installments after that. This is where flippers make money as you can pay 5% down, sell the next day at a 1% premium and make 20% ROI. That is getting much harder to do these days though. You can get an islamic mortgage where you wont make any payments until it is completed Best value = anywhere by the ocean. All the rest are a little risky in my opinion, but dont take my word for it, do your homework. I always like to think in terms of blue and green, blue being water, green being golf course or garden. If it has these ingredients chances are it will hold value. Dubai marina would be my first choice if I were buying a completed apartment. I would have to agree with DK that arnie is the guy to talk to but chances are he'll say run for the hills.
bridge Hi all, I have a few questions regarding buying real estate in Dubai: 1. Is now a good time to buy? I've been reading mixed reviews lately. Will I be getting a good ROI in say 5 years time? 2. Do any banks offer mortgages with 0% deposit rate? 3. If I do indeed decide to buy, and say the apartment will be ready in 2010, do I have to make the loan payments from now to the bank or do they begin after I move in? 4. Which areas do you believe are most affordable for a 1 bed with the best value in the long-run? Thanks for your all responses in advance. :D Dubai Knight
Arnie is your man on this question. I happen to know he is selling a bijou desres at this moment. One careful owner, low mileage, FSH, AC, tinted windows, slight crash damage from where he threw the workmans angle grinder in the pool!
:D :D :D
Knight onetickin Answers to your questions- 1) Don't know. 2) Not that I know off. If anything, with the credit crisis, mortgage companies are now reducing their LTV rates. 3) If you choose Islamic finance, then no you do not make any payments until completion. Upon, which you receive a bill for the back-dated interest. 4) Don't know. firefly
1. No, i would wait for prices to drop more. and who knows what the returns would be by 2010
2. No, usually between 65% and 90%
3. If you buy off plan you will have a payment plan from the developer, if you get a mortgage you will pay mortgage for the stage payments they make on your behalf
4. I would forget about Dubai and buy in one of the other emirates instead. arniegang yep - run for the hills as Max said. I have just sold mine for a ridiculous amount of money to some stupid idiot who thinks it will be a good investment. The bottom line is dont touch anything even with a barge pole and that means completed or off plan. The UAE Gov't only last week announced they will guarantee all investors fund in both the Islamic and Brits banks etc. The banks over there are running scared and like others have said the days of 0% or even 10% LTV are gone. Dubai property owners who have bought in the last 18 months will soon discover what "negative equity means", the UAE banks are scared s.h.i.t.less because they stand to loose huge amounts because of their reckless lending in a market that was on the up, just like the US and UK. The market is now on the down - hold on to your hats for a rough ride, wait a year then grab yourself a bargin and i promise you there will be plenty. bridge Thanks arnie and everyone for your frank responses. I think at this point I will wait it out for at least a year. Hopefully by then I will find something worth investing into. Scratcher It is also dependant on your work situation. I have just started a five year project (construction) here. Now at the moment the going rent for a two bed property is around 180k (Springs - Villa, Marina Apartment) and rising. Over 5 years that will be nearly 1M. For me investing in an apartment around the Marina must be a sound investment. For sure it is not the optimum time to buy, but I wasn't living here three years ago. So the situation is not black and white and a "run for the hills" does not apply to all. arniegang
incorrect
you are assuming rental will increase - it wont
in established property markets property prices reflect rental prices
Why do people believe dubai is any different - it isn't.
Also with a market readjustment downwards that Dubai is experiencing for the first time in its history, the drop in value on a villa or appartment would easilly equate to the amount of rental over the same period.
For example with as little as a 25% downturn in price on a 3million Dhm 2 bed appt in the Manina area, will equate to a loss of 750,000 Dhs over say 5 years.
Say the rental started at 200k per year and reduce this over the same period you end up being even.
Dont forget in this calculation assuming you sale the appartment at the end thus paying 3% agents fee's, the final loss would be 817,000 dhs.
25% is actually a realistic figure over the next 3 years in Dubai and not 5, therefore it is actually cheaper to rent than buy. Justin_dubai sold mine in the Lagoons a few months ago then bought another one in Ajman. will try to hold this one at least for a year to see if it makes me some cash.

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beatwin Regarding your questions, Bridge! 1. Yes you can expect good ROI in next 5 years, at least better than many other major real estate markets. 2.Not sure about that, but it's highly unlikely. 3.Yes, in most case. 4.I'd recommend you go for Ajman ( very near to Dubai with a thriving real estate market). That's all frm my side. Thanks onetickin
Arnie, how much do you expect the market on completed (and off-plan) apartments to drop next year? sa4877 If you have a 5 year horizon and will not need to liquidate the investment till then, I'd say go ahead and buy. arniegang
$64000 question mate - the only certainty is down. If i had bought off plan in the last 12/18months i would be crapping myself right now. bedro
I was tempted to rerun your calculation and correct me if I'm wrong:
Buying an apt at the current time: AED 3M
renting it for 5 years: 200K*5=AED 1M
selling after 5 years assuming 28% equity loss (agency fees included): AED 2.16M
Total earning: AED 3.16M
Assuming a fixed rental over 5 yrs. I don't see a loss unless the renting drops. And it's not likely to happen at least for the next couple of years. onetickin Totally agree about buying shitting myself if brought off-plan recently. bedro, arnie assumes a reduction in the rent over a 5 year period. seardarren I move out in November with work and am renting for the first year to see how the market lies. Probably going to see a market slump for a while so I am hoping that rental prices will drop also. Global credit crunch means less people moving, means more property available and bargains. But need to hold out a bit longer, this crunch is here to stay a while yet. arniegang people need to also remember that over the next 5 years the demand/supply ratio will change in favour to over supply, this compounds the losses in sales and the bigger reductions in rent. arniegang
I did say you would end up being "even" the loss would be a straight loss no rental. I was looking at it more from a shall i buy or rent and we both agree it is better to rent it seems.
However if you bought the appt with a mortgage as an investment then you will make an overall loss over 5 years
arniegang and things will get worse probably quicker than you think. From today the Emirates Bank and Dubai Bank have suspended all secondary market/resales Mortgages Hold onto your hats :shock: seardarren Intersting, I was thinking about three years. Anyway regardless, with the stock market slump worsening regardless of bail outs, construction will slow, it always does. It could go either way, but my money is on a reduction in house prices and rental values. arniegang time will tell people :wink: Gene
Just out of curiosity, how much do you think the property market in Dubai will fall? 10%? 30%? Or 50%? We are talking about the next 1 to 2 years, right? And how about prime locations like Palm Jumeirah, DIFC and Burj Downtown?
If I recall correctly, Dubai's population is 1.44 million and is growing at a rate of about 110,000/year. In order to accomodate this growth (of foreigners), about 45,000 apartments have to be completed every year. However, the delays in projects over the past few years have made the situation worse. Hence, more than 45,000 apartment have to be completed to catch up with demand over the next few years. Assuming 70,000 apartments are required just to meet demand in 3 years' time and to stabilise rental; that would be equivalent to completing 3 to 4 developments the size of Jumeirah Lake Towers every year. I suspect the construction pace here is too slow and that supply would still lag demand in the near future. The fact that investors and landlords own 2 or more apartments does not help the supply shortage situation as well. philh We probable are! "This is a ridiculous statement that is actually not only misleading but untrue. Dubai's now short term oil reserves and revenue are only a small percentage of Dubai's GDP. The oil will be gone by totally 2015. " It's actually completely true and not ridiculous in the slightest. The level of GDP in other sectors (e.g. service, manufacturing, finance, IT, education, retail, transport etc) has grown because of the recognition that oil will one day run out. In other words, the sole reason for the existence of these industries in Dubai is because the pumps will run dry pretty soon and Dubai will need to be self-sufficient and not reliant on oil. And what funded the creation of these other sectors? Oil reserves! So everything is dependent on the level of oil reserves. Dubai Knight
Kinda depends if that number of people really come here. Last I heard, there were more leaving than arriving due to the spiralling cost of living here.
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Knight arniegang
DK is correct. However be careful when you look at the figures. Take the figure of 110,000.
So, take away the one's that leave during this time, then look at the ratio of Expats that earn considerably good money against the poor immigrants from india and the phillipines that come into the country to live in labour camps.
Although i dont have the figures to hand, i would bet £100 the number of property completions far exceed the number of expats that would be in a position to buy or rent.
I do know that 76,000 completions are expected in 2009, and 56,000 in 2008.
As regards drop in value, who knows its anybody's guess but it will be dictated by demand. My personal opinion is that the market is currently over inflated by 25% at this moment. Gene These are official figures from the Ministry and it records the actual population growth in Dubai as well as UAE over the years. I don't see any reason for distortion or intent to mislead. In fact, I am not surprised with the figures as they co-relate somewhat to the ever increasing number of cars seen on the road these days and the insufficient amount of parking lots everywhere you go. All praise should go to RTA who has managed to widen and improve highways like SZR; Al Khail Rd; etc. to accommodate the car population with remarkable success. It's truly amazing how Dubai could keep car and fuel prices so low with minimal taxes (like the Salik and car registration fees) to allow almost everyone to own a car on average and keep traffic tolerable. It has definitely improved slightly over the years if you noticed. Imagine when the metro is completed next year, things would be much better. So my point is this: I trust the Dubai government has the political will to complete all the projects at Cityscape. They are very pro-business and will do everything they can to rectify a problem and attract investments. There will always be oddballs everywhere in the world who will complain even when they are in heaven but I reckon this would not deter the goal and forward momentum of Dubai as there is no turning back. Geographically, Dubai is also very well-positioned and it is convenient to visit any part of the world here. The weather is fantastic for about 8 months in a year which is much better than places like UK where it rains all the time plus winter months are miserable. maximusprime I think you've been drinking the water Gene
Excuse me but why are you here? Where do you get your water from? What's your complaint? :?: maximusprime Im just saying you sound like you sit inside all day and read Dubai tourism brochures. "I don't see any reason for distortion or intent to mislead" How about the fact that it keeps the foreign investment bucks rolling in as long as people think their apartment will be worth something is a few years. "all praises should go to RTA .... accomodate the traffic with remarkeable success"?? are you serious? have you driven in this city? the question isnt whether the projects at cityscape will be completed, it is whether they will be worth anything when they are finished. If they cant fill them with people, they wont be worth anything. shariqq I agree - you must be drinking the water. 29 Years in Dubai, and I can surely qualify to make some comments on what you've said.

Define "remarkable success" man. Do you live on the Palm, work in Tecom and never go further than MoE or Ibn Batuta?

Minimal Taxes? Have you seen what the ridiculously high visa fees are now? Lemme guess, you don't require a visit visa in advance for your visitors...

Fantastic weather? Ok - wait for next month's May - Sep period, and then sit out for sheesha or dinner, al fresco. Not many people can call >40C as fantastic. arniegang
I didn't say do not trust the figures. My implication was meant to show that your figure of 110,000 which i am sure is correct, is open to scrutiny and examination.
But............ i know for a fact that there are no figures published by the Gov't as too how many leave per year and ....like i said the published incoming figures do not breakdown what portion of those 110,000 are low grade unskilled workers like labourers/cleaners or maids that could not afford to buy a garbage can let alone buy or rent a property.
In conclusion, do not let the headline figure of 110,000 fool you into thinking that there are 110,000 millionaires coming into Dubai annually.
Only a fool would believe the government will step in and insist on developments being completed if both they and the developers know there is not a market for them.
Currently they are far too pre-occupied to pumping money into their own banking system like in the UK and US. Even this week Shiek Mo has pumped 70 Billion Dhs into the UAE banking system. You will find this did not make front page news because nothing bad ever happen in Dubai ! arniegang
We are just going to have to disagree, i still maintain the current situation in Dubai has nothiong to do with oil.
You need too do some more research into your facts/opinion with regard to :

This is a ridiculous statement that is actually not only misleading but untrue. Dubai's now short term oil reserves and revenue are only a small percentage of Dubai's GDP. The oil will be gone by totally 2015.
The banking situation in Dubai as in the UK and US and almost everywhere else has nothing at all to do with oil.
See this for the actual figures
and just in case you doubt these figures i enclose a quote from Shiek M last year spelling it out, so even you PhilH can understand
This is of course my personal opinion :lol: :lol: Dubai Knight The current population of Dubai is 64% from the Asian sub-continent. The average earnings of this percentage...is $275 per month! The fuel prices here are capped by the government. Emarat and ENOC are forced to buy their fuel from ADNOC at market rate, but are unable to play price war at the pump. This is the reason why every fuel station has a mini mart or a food outlet as these are their only way to make any return. Currently, these government agencies lose approximately $1 million per week due to the $100+ barrel price for oil. If you want really cheap fuel, drive down to Hatta and fill up at the Shell station in the Omani enclave before the Hatta Fort Hotel. :shock: :shock: :shock: Knight philh There will be a correction in prices, but not a drop. The price increases may well drop, but I'm not convinced the prices themselves will drop in the immediate future. Oversupply will hit the market but in the short-term this will only affect the size of investors' premiums and they won't be making monstrous gains for much longer, but there will still be gains. The economic fundamentals are strong and the emirates are leveraged on massive oil reserves (and, more recently an increasingly diversified economy), rather than huge debts to China as every other nation seems to be. I would say however, that Abu Dhabi is looking like a much sounder investment. The market has learned from Dubai's mistakes and as a result will be much more stable with mature price growth and less boom and bust. Prices are still affordable (just) and, with massive undersupply for the next 3 years, is a very attractive investment. arniegang
what planet have you beamed in from?
"there will be a correction in prices not a drop"
:lol: :lol: :lol:
which bit of "Emirates Bank and Dubai Bank have ceased all resale mortgages and last week Shiek Mo pumped 70 billion AED into the banking system to prop it up" did you not understand ?
This has nothing at all to do with oil, it is to do with the capacity of the banks to finance mortgages to buyers and investors and even developers. The market in AD has learnt nothing from Dubai, they are running parallel to each other. john smith Arnie has been saying the same thing for at least a year. During which time, property prices have pretty much doubled. Thanks for your insight. Dubai Knight
Yes they have, to buy from new or off plan. How many people have actually managed to re-sell?
:? :? :?
Knight arniegang
and was it not you John smith who earlier this year was advocating good buy's at JLT earlier this year, :wink:
What a joke JLT are near enough un-rentable let alone unsaleable. Anyone who bought there needs to see a doctor. Even most of the agents in the Marina area wont touch JLT. :lol:
Property prices have nowhere near doubled in the last year. Like DK points out, the hype has been with regard to off plan purchasing frenzy. People can pay what the like at the height, its a very different story when it comes to selling.
Emaar - Emirates Mall, late last year and resales this year was asking nearly 3 million for a 1 bed ( 800 sq feet)
Does anyone really believe they have doubled in price?
,
I would bet when they are complete next year they will struggle to achieve 2 million.
If you ask any reputable agent in Dubai now they will confirm re-sales are few and far between and the market is starting to stack up with unsold properties - end of..
Yes i have been saying this for the last year and to those who are realistic it is happening now - i wasn't that far out john smith so I wont get a return on the 1.2 million that I bought a 1 bed in JBR for in January? sea view, high floor? thanks again. long term I like JLT and will definitely look there if the right thing comes up at the right price. Dubai Knight
If you are seriously looking at buying there, look very very closely at the quality of what you are buying.
A friend just rented a 2 bed apartment there and the quality was like something you would have found in a 1960's Moscow building! The construction was done by a blind man using bits of cardboard and some sellotape. To make it worse, she had to lay out 130,000dhs for the privilege of living in a glorified cupboard!
Complete crap!
:( :( :(
Knight john smith No I'm not seriously thinking about buying there or anywhere else at the moment.

What frustrates me is where people like Arnie express their OPINIONS as if they are fact.
His statement above is a typical example - it is nearly impossible to find an apartment to rent in JLT and the prices are very high. If you can find one you have to act quick or it will be gone.
When I looked at JLT (1 year ago), you could buy a 1 bed in Saba for about 850K... or a bank manager as they have made a very tidy profit. philh Err, which planet have you been beamed in from Arnie?
"This has nothing at all to do with oil".
Dubai as we see it now and as it will develop in the future is fundamentally based on oil reserves. Every market and industry (especially the banking and finance markets!) in Dubai is inextricably linked to oil. A trivial concept to say the least.
"The market in AD has learnt nothing from Dubai"
Another strange opinion. AD has gone to great lengths to develop its Urban Structure Framework Plan for the year 2030. Even a cursory glance at this document will show you the lessons learned.
"Shiek Mo pumped 70 billion AED into the banking system"
Who knows the effect this will have on the market? I am of the opinion that such a move provides the financial markets and its investors with a great deal of confidence and security that they have such financial backing. Further, the 70bn will increase liquidity and in turn increase the level of lending activity by the banks. You will have noted similar moves by governments across the globe.
Let's get one fact right - nobody can say for sure that prices will drop. I am of the opinion the price increases will drop (i.e. people wont be doubling their money anymore, but they will still be making gains), you are of a different opinion.
Remember, nobody can be completely sure of what is going to happen, the best they can do is offer an opinion. Have some humility to accept that others do not share your views. arniegang
I dont believe for one second you bought this in January for 1.2 million. If you did it was probably from someone who was deaf,dumb and blind
Summer 2007 they were selling like hotcakes @ 1.5 million
:roll: john smith
So you are accusing me of lying?
Purchased through better homes on the 21st january. There were several available at around that price at that time so again goes to show that you are not as in touch as you thought (maybe all the sellers were deaf dumb and blind?)
In summer 07 you could buy 1000sq/ft 1 beds direct from Dubai Properties for 1.22m and that included 99% finance from Dubai Bank - remember the adverts...?
They are currently advertised at 2.5 - now I don't think for a minute that I would get that much for it, but whichever way you look at it not a bad investment at a time when you were saying exactly the same things as you are now. Dubai Knight Re the oil debate: Dubai has hardly any oil. It has some gas, but the oil revenues are actually shared incomes gifted from Abu Dhabi as the legacy of the 'United' Arab Emirates. As a nation the UAE is oil revenue rich. As individual Emirates, some are have's and some are have nots. :? :? :? Knight Pimpin80 I think one of 2 things will happen: Either prices will freeze at their current levels for a LONG time (2, maybe 3 years), or else there will be a major correction in this market, despite what other people might say. Dubai is on planet earth like the rest of the countries, it IS affected by the global crisis, liquidity from local banks has dried up, western expats are not buying anything in Dubai by fear of said correction. So basically there is no money to buy. Despite people claiming that prices will keep going up, the reality is that the average salary in Dubai is not even close to supporting an average real estate purchase, and as long as these 2 variables are not in line, the market will struggle. For them to get in line with one another, prices must freeze in order for salaries to catch up, or real estate will have to take a drop to adjust. In the past foreign investors fueled all these crazy price surges and crazy activity, I think Dubai has now reached another phase of it's market where buyers will be mostly people living locally, and buying in order to live in and not as an investment. The gains will be more modest as the market matures, but on a 5 to 10 year outlook, Dubai is a great investment, with high immigration, accelerated devellopment, high ambitions, strategic positioning, and the rise of Asia and Eastern Europe. My guess is the real estate market in Dubai will do slightly better than most in the world for the next 5 to 10 years, then it will follow the herd. NickTheGreek Hey Arnie, can i ask what industry do you work in......banking, real estate, hedge funds? As you seem to know what is going on in Dubai i was interested to know. I remember back in the UK the papers had been saying that house prices are going to fall EVERY year since 2000 and look, it has taken 8 years to hit. Back then EVERYONE was an economist and with each year that past noting happened! Now I'm not saying that they same will happen here, I know of lenders here that are still offering 90% LTV's....now I'm not an expert in the banking sector but surely if the banks have reached their max lending amounts for the year then the lender would change the LTV's as there is no money left in the pot. Personally I think that the Gov here didn't see Dubai would get this much interest from all types of people. Yes they have had the scams on buildings being sold and the "investment" but which country doesn't at least here people are put in prison for writing a bad cheque! Now with Sheik Mo adding this cash to the market. Do you really think that he would let his economy fail or would his other Emirate Brothers ! Dont forget the UAE share the oil and gas revenue income and have been doing so for some time. Dubai wanted to have another stream of income apart from the oil and gas, Dubai was the first on the map, a lot of people in the US, UK and Europe think that Dubai is the capital, Now I know that you are going to shout me down about that, but its true, so the other Emirates are all earning from the vision that happened in Dubai all those years ago.Think about it Sheik Mo, wants to have the Emirate that is the tallest this and the biggest that, fair play to him, he wants to have a place that people want to come and see. Also you always have two types of sellers, the ones that have to sell because they cant make their next payment and the ones that can! Now the little man that flips with 5% yes he is one the that will be effected, (to be honest good, glad to get rid of him) but with all the new RERA laws coming in, this man will go somewhere else. So that leaves us with the one that can make his next payment, he doesn't need to PANIC like the other man, so he will hold onto his property. To be fair I am starting to buy properties at the moment off plan with an islamic mortgage so I cant see the issue, yes you can some good prices with those people that cant make the next payment. I'm not worries about a correction, a drop in prices or what ever you want to call it. Rental properties are in great demand at the moment, i know of agents that are searching for stock and they have so many people looking.....so for the rental prices to fall is not going to happen. The sales and rental market do not work together, look at the UK house prices are falling and the rental market is going nuts.......dont forget people need to live somewhere! We cant pitch a tent in the desert!! Some people might go back to their home countries........then again some companies pay the rents for their workers! Also Lloyds, HSBC and Tamweel all increased the LTV's yesterday, so I dont think that they are worried!! So come on the tell me that I'm wrong and stupid!! Big it on! arniegang Its not the case that the banks have reached their max lending amounts, the two factors that limit their lending criteria are the amount of ready cash available to them in relation to the amount of free cash from investments and savings/deposits. The viability of lending based on the affordability and means by the purchaser. At the moment if you take into account the interest payable on a mortgage and offset this against the income it can produce, there is little or no scope in Dubai at the moment for an investor to break even, let alone make an income. Take for example an average 2 bedroom Emaar propery in the marina area. 3million Dhs value 25 year mortgage 95% LTV @ 8% interest plus capital repayment, plus 32,000 Dhs annual maintenance charges and agents costs. now, offset this against the gross rental income, and factor in a say a small 10% reduction in value. If anyone could show me a calulation that would prove this to be an excellent investment, i would be interested to see this. As regards "off plan investments" its interesting that Nakheel has shelved all future building projects (commercial and residential) and no further developments will take place until further notice. I would bet DP's will follow suit at some point. NickTheGreek As regards "off plan investments" its interesting that Nakheel has shelved all future building projects (commercial and residential) and no further developments will take place until further notice. I haven't heard this...what about the 1km tower is that also not going to be done? philh "If anyone could show me a calulation that would prove this to be an excellent investment, i would be interested to see this." Your calculation is still based on your core assumption that the prices will drop. Here's an alternative calculation: 3m value, mortgage rate 6.75% which would mean monthly repayments of around 20,000dhs. Offset against annual rent of say 200,000dhs and you have a very handsome yield of 6.7%. Add to that a year on year property increase of say 10% (which would be the correction I, and others, are referring to and is typical in a mature and growing property market) then you have an outstanding investment. Assuming an exit strategy of 5 years then your property would be worth 4.8m and you would have had someone paying the majority of your mortgage for that 5 years. Not bad in my books. Of course my calculation is based on a number of assumptions (mortgage rate, rent, property value increases) but that is how I see the market going over the next few years. More mature and less boom and bust. Guess we have to agree to disagree! And on Nakheel suspending all future projects - not sure what your source is for that but I am pretty sure that is not true. Are they scrapping the entire Waterfront development, for example? NickTheGreek I am going to agree with Phil. Nakheel scrapping Waterfront, The 1km Tower (largest in the world), Trump Tower - do I need to carry on! Why would you look at a property that is going to decrease in value than increase..... surly the investment matures ! I don't mean to harp on....but Arnie, you didn't tell us what you do... I have heard all this before, "The prices here in JBR where too much two years ago, it was 1,800" "So you didn't you buy then?" "Na - it was over priced!" "So now, are you going to buy?" "Na - It's over priced!" "Its 2,500!" I rest my case! Do you carry out legal work as well part time.............. I'm looking to renew my visa, can I do the visa run! I'm on a UK passport!! I'm sorry........................... but what have you been reading! Or maybe smoking, hang on can you hear that.......yes it's your mother ship calling you!! I have been all over the web and I am happy to say that no one is suspending building or new projects in Dubai, I know that Emaar have just sold a contract to build....... a new tower in Downtown....and yes I know before anyone says anything............. there is too many. Its called, (at the moment of writing this post) "plot 35". When I know more I will let you guys know! So to say that Nakeel has shelved future projects......well I will let the rest of us decide that. Did you go to CityScape!? philh Thanks Nick - good to finally have some intelligent and well thought-out posts on this topic!
It's pretty easy to grasp the basic concepts, yet some have displayed remarkable ignorance (to say Dubai's situation has nothing to do with oil being a particularly shocking example of a lack of understanding).
Anyway I'm sure the property price debate will rage for a while and it will be interesting to see what happens. I'll say again that I reckon Abu Dhabi is the place to invest - it's where Dubai was 5/6 years ago so prices are lower at the moment hence there is much more growth potential; it is doing things differently from Dubai (see Plan 2030); it has stronger economic fundamentals than Dubai; it is massively under-supplied and will be until at least 2011/12 (so clearly not "running parallel" to Dubai as Arnie again erroneously suggests); it is in less of a rush than Dubai as it's oil will last for much longer hence higher quality construction and well-planned developments (hopefully!). bedro
Are you sure about that? What about Dubai waterfront? NickTheGreek Hey Bedro...........I just want to make sure that you understand that, the comment about Nakheel was not from me, if you read the post above mine then you will see. Phil, yes I can see that AD is going to correct way to develop everything, there is still a huge housing shortage at the moment, AD is a good investment, at the moment people argue that its a better investment than Dubai, and that its a quicker market to flip, personally and this is only my opinion AD is more of a long term investment, as the capital growth would be more, as AD are adding something else to the Emirate, besides going out on a Friday all day drinking binge !! But here I have seen so many people selling Remraam by Mizin, I must be offered this development 5 times a day!! people and there next payments!!! firefly Very interesting facts and figures, but.. to make it simple.. nobody is buying unless they get a bargain..most sellers wont sell at the prices buyers want to offer, and even when getting a bargain, the banks wont readily offer the finance. And rental prices are still rising.. dream What about Ajman, how does it look like as an investment right now? Monsoon People will probably hold back buying at least for a while till things stabilize. benwj
Along with many other experts over several years.
If you keep saying that the market is going to crash, eventually you will get it right, and I thnk that Arnie's wish has finally come true.
The irony is that it was the gobal crisis, and not internal factors that have caused the Dubai 'crash' and Arnie can now take advantage of some bargain GBP stock prices using his US$$$.
Arnie, you will need to go back to your old avatar, but you will now have a chest of diamonds instead of gold coins.
Nothing is selling at the moment which would normally lead to a drop in prices. This is yet to materialise, but it will be a lot clearer in a few months when next stage payments are due.
Sales were being driven by the speculators who have vanished, but rents are being driven by the end user, and the lack of rent supply vs demand is unlikely to change dramatically any time soon. Rents and sale prices are at odds with each other rather than in sych as Arnie suggests.
But as soon as the global market recovers, which I think will be sooner rather than later, we can go back to waiting for the real Dubai crash.. the one that it does all by itself without any help from abroad. Dubai Knight Good post! As for Nakheel cancelling projects, they are continuing with the existing planned and approved projects such as Waterfront, Palm Deira(dumb project) and Al Fardan etc., but they are holding back on any new developments that are still in the concept stage. Despite the impending implosion, it is unlikely that we will see a dramatic change in the reantal prices as the new rules regarding sharing of properties is forcing many companies (as it is they who tend to overload premises with staff in order to reduce overhead) are now renting the new stuff at outrageous prices due to forced neccessity. A 1 bedroom apartment in International City now demands a rent of 80,000Dhs and a company will expect to put 6 staff in what is little more than a badly built broom cupboard. What will Municipality do next? 1 person per room? All batchelors (labour or professional) will be forced to live in labour camps and single professional women will be forced to live in compounds surrounded by barbed wire...sounds like Saudi Arabia! :( :( :( Knight sivaelf1 [quote
Dubai Real estate market looks good for me with a long term perspective.Its a good shift which is happening from a Sellers Market to Buyers Market. Clients /Investors standing in Q buying properties is going to be the order of past. How long that will continue. Its a temporay phenomena. One day market needs to go to a buyesr Market and this shift has started happening. If some one says dubai market is going to be doomed, i beg to differ with that.
Only Market which has some sembalance and shape other than china is Middle east Market.Hope guys u will agree with me.
Markets will undergo churn and wat i have seen in dubai churns happens quite fast and not gradual and even the shift to buyers one was also swift. Now the role of Real estate Agents are going to be great and tough too. They are not going to sell /rent sitting from office. they will have to go out and do the job.
Good times is wat i will say
As for Nakheel cancelling projects, they are continuing with the existing planned and approved projects such as Waterfront, Palm Deira(dumb project) and Al Fardan etc., but they are holding back on any new developments that are still in the concept stage.
Despite the impending implosion, it is unlikely that we will see a dramatic change in the reantal prices as the new rules regarding sharing of properties is forcing many companies (as it is they who tend to overload premises with staff in order to reduce overhead) are now renting the new stuff at outrageous prices due to forced neccessity.
A 1 bedroom apartment in International City now demands a rent of 80,000Dhs and a company will expect to put 6 staff in what is little more than a badly built broom cupboard. What will Municipality do next? 1 person per room? All batchelors (labour or professional) will be forced to live in labour camps and single professional women will be forced to live in compounds surrounded by barbed wire...sounds like Saudi Arabia!
:( :( :(
Knight arniegang
No disrespect Nick listening to rumours and actually knowing what the banks are actually doing are 2 different things.
I can tell you as a matter of fact that LLoysTsb (dubai) with effect from Monday are ceasing all appartment mortgages
I will repeat this. WEF from Monday LTSB are ceasing ALL appartment mortgages and......
All villa's pruchases will now carry a 50 % LTV.
Barclays bank are near to the point of pulling out of Dubai.
The current banking system absorbed the 70 billion cash injection within 48 hours. To return to the point of 3 months ago they require a further cash injection of 150 billion AED just to maintain their existing commitments.
With Oil trading at the current low and the predicted further low until January 2009 , the Emirate of Dubai cannot sustain any further injection of cash into the UAE banking system.
As regards 90% LTV's. They are out there, but in reality very few people would be able to meet the criteria to obtain a 90% LTV. The 90% you will find, is a headline rate to attract customers. The reality is that the average LTV by all 20 banks in the UAE that offer mortgages to expats is now 70%.
The UK rental market is not going nuts at all. In part the main force that has driven up rents are the new LHA rates introduced by the DWP and the Local Authorities.
Very few expats in Dubai are earning enough to rent their own appartment - fact. Their housing allowances are far short of the amount required to rent even a one bed appartment in say the Marina Area. With the new law issued by RERA to protect the spiraling rental market the new 2 year rule will tie landlords hands. Coupled with the new 3rd year nominal increase to tennants, the rental market will become static. Add to this the number of properties coming on-line within the next 2 years , it is anticipated the rental market will no doubt follow that of the current property market ie stagnation followed by a downturn. arniegang
Sorry to have too correct you DK - Palm Deira is put on cancel/hold until 2012.
Last week Dubai Holdings rented a whole tower owned on the Marina by a private developer at 70,000 Dhs per unit and are to leave it empty for 24 months. This was done to protect the rents at JBR.
Last week Betterhomes dismissed 75 sales consultants.
Now that RERA/DM has tackled the villa sharing problem, they plan during 2009 to achieve the same goal with appartment sharing.
From Nov 1st RERA will implement the new rules regarding
1/ Rentals and ...
2/ Land Registry in that all owners must now register their title deed at point of purchase before resales.
This has the serious and profound consequences
a/ it is the end of Flipping in Dubai and..
b/ No "off plan" re- sales can take place until completion by the developers and hand over to the original purchaser.



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