Dubai villa prices up 19.9% in year, says Knight Frank

Posted by: realiste Tuesday, 6 November 2012 11:18 AM[UAE] - uae

another day, another story in Real Estate Dubai-style.
Still, this keeps some firms busy I suppose, trying to bump up prices.

Reality below in another AB article.

"More distressed assets in Dubai now than downturn - Tasweek "

There are more cut price real estate assets available in Dubai now than during the worst of the downturn in 2009, as developers and owners seeking to offload units accept losses in order to close a sale, a real estate executive claimed.

Posted by: Tony Monday, 5 November 2012 2:46 PM[UAE] - UAE

the max avg appreciation is no more that 5% and this too could go back to zero if the global economic climate remains down.. The upside buying a home in rural Michigan sounds a better bet than Dubai

Posted by: desert dream Monday, 5 November 2012 8:39 AM[UAE] - UAE

All the action is by the broker set. There is barely any end user demand. Also there is a huge pipeline of villas in JVC and JVT. Again its all speculation as what we saw in the Emaar launches. I would not get too excited about it but if i was a real end user i have no choice but to buy the property at the inflated price (so a broker can walk away with 100k + after putting his deposit chq!) If there is any weakness in the world economy through 2013 then prices can get hit again, however if it strengthens then huge amount of broker and developer activity will start in dubai.

Posted by: RaOne Sunday, 4 November 2012 4:19 PM[UAE] - UAE

KF...have you every heard about dead cat bounce... or double dips?

Instead of cheering again, give investors well researched materials. Dubai has too many under-construct villas.

Posted by: Navin Sunday, 4 November 2012 4:17 PM[UAE] - UAE

It is such fun to read reader comments they sometimes out do the article itself! This article like most others on Dubai real estate by AB recently is spot on with some qualification like the location and desirability of the property but these 20% gains made by smart investors who were not waiting for the positive reports to come in but moved in on gut feel will most likely not be repeated by those who came in late! but Dubai offers the best value for money in the region even at the 2008+20% price level.

Posted by: Wildwine Tuesday, 6 November 2012 12:05 PM[UAE] - UAE

@Navin, sorry, it was not personal. My point was that 35% capital gain in 01 year is still very steep for real estate, add to that your rental income; works out to circa 40%.

Posted by: Navin Monday, 5 November 2012 4:49 PM[UAE] - UAE

@Jake; hey this is getting personal now! in any case let me explain my position, i happen to buy to live not to flip and i did not buy expecting to make a profit immediately but because it seemed the prices had hit bottom, but if this 35% becomes a 75% in a year or so and i feel the market is again showing signs of dementia then the profit will be worthwhile to relocate to a rented accommodation again till the next time around! there is always a chance that the market would go south but then i never bought with the intent to make a killing and the rent saving will justify the purchase :)

Posted by: Wildwine Monday, 5 November 2012 2:46 PM[UAE] - UAE

@Navin, out of curiosity; 35% and you still want to hold, aren't you greedy then??
I am talking 35% return on investment (irrespective of base price).

Posted by: Navin Monday, 5 November 2012 12:30 PM[UAE] - UAE

@wildwine; well i recollect those surreal times very well i had friends cancelling bookings at Springs and preferring to lose their Dhs. 5000 deposits rather than continue and taking people to Emmar offices where Meadows villa's were available for Dhs. 1.1 Million (which now sell for 4 Mil) with them letting it pass despite having the money and people who did not get greedy or got into the flipping mode did not lose! 35% is too much or too little depending on what is the base price you buy!!

Posted by: Wildwine Monday, 5 November 2012 11:28 AM[UAE] - UAE

@Navin, If I recall correct nobody was laughing at Dubai real estate in 2005; on the contrary everybody was onto real estate since since 2005. So please don't try to project yourself as one who read the market so well so as to give credibility to your statement. Nobody read the market, that was a fact, everybody bought on hunch and some got lucky whilst most were not.
If you made money well good on you.
Don't you think 35% (assuming it is in 01 year) is rising too fast? Easy mortgage availability yes; but what percentage of current population is actively seeking mortgages (given uncertainty in the market).
Yes the market will recover; but it will be gradual; anyway in most mature markets real estate is a long term investment (i.e. at least 5 years +).