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Property market fails its big test
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 27 May 2009Posted on Monday, 29 June 2009
nice article......nice comments
Posted by Shailesh at 11:20 UAE time
In Dubai, nobody is intrested in selling or buying the property till the picture gets clear in which direction market will move and thus such auction will see similar results. One can quote the price as low as he desire for buying or as high as he wants for selling. Those percentage fall in property prices are imaginery figures for individual. Writing article and expressing view on it seems to be new favorite pass time................ let keep busy till the market recovers or fall.
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Posted on Monday, 1 June 2009
A good concept
Posted by R.A. at 09:00 UAE time
Anil - A very good article, well done.
Property auctions typically indicate the true, market value of a property in a downturn, the price paid in an arms length transaction, between a willing buyer and a willing seller. Not always in an auction in an established, historic market are the sellers distressed but sometimes the asset may have reached the end of its economic life cycle for that particular seller and will provide another investor with scope for a return. Clearly the growth that has been experienced in Dubai over the last 24 months (although I am not sure, no matter how respected a company, Knight Frank can provide realistic statistics when they do not operate in Dubai) was unsustainable and not built on any solid, fundamental investment priciples so house prices only now are beginning to find their real value, after the speculators have been pushed from the market due to lack of finance on off plan properties. It is now that the 'true', traditional investors will benefit. Those who hold property for a number of years not weeks and work a property through it's lifecycle.
The auction was a fantastic idea and well done to Madania for trying to bring a new concept to the region, an incredibly difficult task with the gluttony of properties on the market (in differing communities) that are all the same. Due to this, for the auction to be a success, it's almost essential for there to be distress among the sellers in some form, where there is an absolute need to sell (whether that means making a loss or not) as there is nothing else to differentiate between properties and little, if any, scope to add value.
I'd welcome more auctions in the future but there will need to be some fundamental changes before it will be a real success.
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Property market fails its big test
Posted by wildyuvaaa at 07:38 UAE time
Well done Anil. The open and transparent views of what is happening in Dubai real estate sector are hard to come. This kind of open views should encourage others to follow suit.
For sure everyone who has little common sense should have realised by now that Dubai property market is not down but dead, and ofcourse you cannot bring back something which is nomore.
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Posted on Saturday, 30 May 2009
Hope to see such honest reports
Posted by AVH at 11:25 UAE time
Amidst the polarization, with the western media gloating over Dubai's real-estate problems and the local media acting like nothing ever happened, it was nice to see an honest and candid report with a bit of humour thrown in on the side.
I guess that is why I read Arabian Business at least twice a day, wherever I am!!
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Posted on Friday, 29 May 2009
May one of the sellers at the auction KINDLY comment so as to put everything in perspective
Posted by SNY at 14:01 UAE time
I was one of the sellers at the first and only RERA APPROVED property auction. My property was the only property to receive the highest amount of bids - PLEASE NOTE: It did not sell and had to be passed over AS the highest bidder did not reach the amount to cover my outstanding mortgage to the bank in addition to the Agents commission or transfer fees required at the Land Department for transfer. PLEASE NOTE AGAIN: It had nothing to do with not reaching the sellers reserve price.
I am not a distress seller in the real sense I am a "distress seller" because I will lose FULL CUSTODY OF MY DAUGHTER to a GCC National if I am unable to show monthly income/life savings and a roof over my daughters head to the High Courts in the UK.
My hats off to Al Madania for putting on such a wonderful 3 week campaign and to their transparency as well. There are only 3 real estate agents in Dubai anyone should deal with and Al Madania are one of them. I myself have owned and run real estate agencies in Qatar and worked for some of the top developers here in the UAE. (a trilogy can be written on them!)
So to the writer of this article on Arabian Business.com as well as all of you whom have chosen to comment - Perception and Reality my friends - Perception and reality.
You are all so very, very shallow and obviously still need to experience alot more in the book of life.
From the Seller of Lot 1 at Arabian Ranches who still lives in hope that someone out there will purchase my wonderful home so that I do not lose my daughter.
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Posted on Thursday, 28 May 2009
Visa rule may change
Posted by hormaz at 00:17 UAE time
Me thinks the 6 month rule was a test , to check response. Obviously since its negative i expect it to change , probably aftr Ramadan. Meanwhile Dubai's exodus continues , and immediate action needs to be taken. Roads are empty, apartments empty...its eerie...Dubai has never been hit so hard. Morever since 40% of its GDP was dependent on real estate i expect its population to be down atleast 10-20%.
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kudos to Anil ...
Posted by S.R at 20:42 UAE time
I am pleasantly surprised at this frank and open article. It is an absolute delight to read and hopefully this should encourage others to follow. Well done.
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In response to increase in villa costs etc
Posted by sameer singh at 16:14 UAE time
I am sure the prices are increasing but its only on paper where it rising no one is buying it, just 1-3 properties sold per day in dubai so that rise really is not a true rise. Also remeber when the process of bottoming out happens in any market it never happens at one go, it happens in waves of 2. we already 1 wave now the secon had started where we will first rsie and then hit a new bottom. so all those buying or speculating currently be care full.
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Property Prices up 5-10% !
Posted by Sammy at 16:06 UAE time
Mr. Showkat Wani has stated that Palm Villas were up 5-10%! I'm not sure how we should react to this, but I think somewhere along the lines of how Anil wants to take his ambitions to Latvia, a totally baseless claim. Unless ofcourse 'Tom' sold to his cousin 'Jack'. This denial stage, though a long and painful one, is a necessary ingredient before the healing can begin. Perhaps the next 40% market drop will get people to the 'Acceptance" stage, and a more rational pricing of Dh 400/psf is reached. The sooner Dubai pricing matches global like-for-like levels, the sooner Dubai can attract sustainable (vs. speculative) demand. Our hats up to Mr. Anil and all his articles. And utmost respect for his mission to always "bring light to the truth".
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Prices have just started to fall, I will tell why
Posted by Tony at 14:48 UAE time
A reminder to everyone who think of buying an apartment in Dubai or a home. The laws in the UAE doesnot permit that some one aquires citizinship or even permenant residency, so who will settle there then? rich people only, umm but rich people have other places already in the bahamas and other nice places. the property market in the UEA boomed becaue we were speculating and I was one of them I was buying and selling and buying and selling , its a commodity like stocks its virtual. but the hard reality is that these building stand there and will be for the next 50 years. more people are leaving Dubai and Dubai soon will be deserted as Dubai needs citizins and not speculators. God be mercy on you.
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Why?
Posted by Osama at 11:44 UAE time
Why would anyone take the risk of investing so much hard earned money into property they could never benefit from? If they purchase it, they can't rent it out as no one is willing to live in them at that price. They can't even reside in them thanks to the 6 month visa rule.
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They just want to trick you
Posted by Patrick at 11:02 UAE time
Real estate agents, in that case disguised as auctioneer, will use any trick in the book to sell an apartment. Prices are still very high compared to anywhere else in the world and for what you are getting, the quality is not anywhere near the average. Do not get tricked again and later on complaint about it...
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Lets not fool ourselves
Posted by sameer singh at 10:37 UAE time
the market is in a bad state and this article goes to show that.
However hiding the truth will only damage the market further.
Some figures, just checked the RERA website in 1990 and it shows only 48 properties were sold against 40,000+ in 2007. If you follow day to day in 2009 and hardly 1 property gets sold per day.
so in terms of demand the drop has been 99% but in terms of costs it is still 40%. even at these lower costs they are still expensive when compared to other parts of the world. Its demand and supply which drives the market and the costs need to keep coming down untill its leads to an increase in demand. so untill we start seeing 100+ sales per day i doubt the rate will pick UP and if they do without that happening then we are in for a bigger drop so beware people, the bottom is far away.
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Property Prices
Posted by Showkat Wani at 08:30 UAE time
Some information for you straight from the market. Villa prices on Palm Jumeira prices have risen by 5 to 10%. Villa prices in Springs, Greens, Meadows, Ranches too have stabilized. Particularly interesting has been Jumeira Village where prices have actually risen in last two months. As for an exodus from Dubai please inform me if some places have opened up in the top schools, quite a few kids need moving....
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Denial
Posted by Osama at 08:13 UAE time
First the lame law which supports the developer instead of the buyer, and now this. They're clearly in denial.
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