Dubai, Abu Dhabi property sales at near standstill

Posted by: DXBRAT Monday, 2 February 2009 3:38 PM[UAE] - UAE

Leo, I hate to say this. Not only is your analysis intellectually dishonest, but it also intellectually flawed. First of, rather than foreseeing, you can actually experience the drop. http://evolve.ae/forum/viewtopic.php?t=6960 Now regarding people moving to Dubai: Don?t want to be rude here, but I am wondering which brand of cigs you smoke. Simple math: Hiring freeze and layoff (you realize this is a reality right?) = lack of jobs. No jobs = expats leaving. Less people (even with the current inventory) still equates to greater supply (however the reality is that there will be a few more units coming in this year). As for cap rates being 12% and rents being as high as 40% of income. See the thread link above. Cap rate = net income/price of property. If rents are falling then how is your cap rate static? Unless property prices falls along with the rent, there is no way in hell you are going to see 12% here. In mature markets you see lower rates because of market stability and most folks bank on YOY capital appreciation as well (please do not compare DXB to major cities). Are you saying they are lending up to 80% on apartments? It?s irritating to see that people are STILL making 'feel good' statements shooting from their hips. Realitybitesgetusedtoit.

Posted by: Happy for Agents Wednesday, 29 October 2008 5:29 PM[UAE] - United Arab Emirates

Finally you'll have to work hard for your commissions... long gone the days where you had the luxury to mistreat your customers.

Posted by: Leo Monday, 27 October 2008 8:56 PM[UAE] - UAE

I do not foresee a substantial drop in prices for the properties. As long as new people are coming to Dubai and the stock for completed properties is still very short, you cannot expect rents to go down. Currently rents after bills give landlords 10-12% income on their property. Would you sell the milky cow? Same rate in Berlin or London will hardly do 6%. Forget about the drop - more than 100 000 people are coming to Dubai each year. High rents in Dubai have the basis of higher - than in other places - incomes. We have no income tax here. So people decide to pay more for better places compared to cheaper locations. This results in rents, driven by end-users, hitting the sky. That's how the market works. Offplan is different. Paper property might fall, many speculators are defaulting currently, some of the developers may freeze their construction works. But... this will not increase the supply, right? One of the recent polls showed that more than 50% of Dubai citizens are paying more than 40% of their incomes for rent. In couple of coming years they will decide to take the mortgage. Or probably they will leave to their homes to fight for working places? As rent market continues hitting the sky, It seems that they will substitute investors soon. When you tried to rent an appartment for the last time? Dont make your judgement before you try. It is crazy now. By the way, major banks has already increased their lending rate to 80%. Check NBD, Amlak

Posted by: MUKESH BHATIA Monday, 27 October 2008 8:29 PM[UAE] - india

What goes up rapidly,comes down MORE rapidly! The hype which was created by UAE property developers was unheard of from any other world markets-the UAE BOOM is man-made hype created by vested interests!

Posted by: james Monday, 27 October 2008 3:00 PM[UAE] - UAE

We were all waiting for this day to comes when the real estate market comes crashing down....and I hope it does The reason is simple....GREED this includes the landlords , developers and their agents. We dont mind them making a reasonable profit on on their investments but during the past few years , they all have become more greedy causing the rents to go higher and higher, which is the prime cause for an inflation of around 13 % as it is so costly to live here. They are bringing more harm to Dubai, since people will no more be interested to stay here...