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Dubai house prices set for further 20% fall - survey
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 15 June 2009Posted on Thursday, 18 June 2009
Are Rents Really Falling???
Posted by Aloma Dsouza at 11:00 UAE time
I do not really believe that the rents are goin to fall because we just received a 15% increase in our house rents this month.
The new term starts from August. Who do we believe- The Media or The Rent Owners???????
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Posted on Wednesday, 17 June 2009
Parallel reality
Posted by Luis Sisamon at 09:44 UAE time
Wowo Omar I have been following your posts and I have to say that I find them enlightening.
Thanks to them I have just discovered that I live on parallel (and wrong) universe where JBR occupancy is less than 30%, the number of cars crossing my street (in Marina) has reduced notably, rents have collapsed,...
I need to spread the word to my former colleague trapped with 2 properties, the guy from a construction company who after more than 10 years in dubai yesterday confirmed me the occupancy rates in JBR and a number of people who seem not to be living in JBR.
Please Omar, give us access to your universe, because things seem to be way better than in ours. Also include Knight Frank in your instructions as they seem to (wrongly of course) believe that Dubai property price has dropped 40% and there is another 20% drop to come.
We will not get out of this deep hole by wishful thinking and sweet talking as many governments seem to believe.
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PART TAKING PART LEAVING
Posted by MOHAMMED KALEEMULLAH at 09:43 UAE time
Thanks for your advise Omar, take it or leave it. I sincerely heed to your advice, however, I will just send back my family home and will stay here and save some money for myself, which I was not doing so far. Now, they increase the rent or decrease the rent, RTA impose new fine or waive it, they bring Train or no Train, it just doesn't matter to me anymore. Reluctantly compelled to continue here since honestly, situation is more worse in my home country. Thanks for snatching away my social life.
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Posted on Tuesday, 16 June 2009
Property prices in dubai....
Posted by yasin bawaney at 02:48 UAE time
I agree the real estate sector can not return to its peak level of 2008 as the laws are very investor and resident unfriendly and lot must be done for dubai by the authorities .I belive dubai does not want any investors for its economy and is a not a home friendly country at all.Authorities does not want to aknowledge any facts and issue their statements which are very much unlike the current situaion.Visa laws regarding the property are totally unhelpful and if u buy a property in states one get eligible for permanent residency permit which will later on grant you citizen ship.I see uk as more stable investment property market then dubai where laws do not change periodically.The effects of decrease in population wil be felt after the tourists return back from holidays .
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Thank you Harry
Posted by Omar at 14:47 UAE time
Thank you Harry- Thank you very much. It's short and sweet! If you like Dubai, buy a property and if not, no need at all. Leave to a place that you like. No need to feel any pain!
Mr. Tedesco, which your name means German in Italian!, i ALWAYS try to explain what Harry said. Just stay where you like. Does a British have any right in the USA or does a Swiss have any right in Japan or Australian in Germany?? NOOOOOO. This country is for its own people. Whilst Canada is distributing its passports left and right, Japan never ever grants a citizenship to any foreigner even for chidlren born from pure Japanese mothers or even for people with pure Japanese blood living abroad. So UAE has its own rules and culture, if you like it, just stay you are welcome if not, you need to find a place where you will be happy from deep inside!SIMPLE.
MANY people LOVE UAE and that's why there are so many expats here. No one is forcing anyone to buy. I strongly believe that the regulations should be much more appealing and flexible so people buy more and more.
NEW FACTS:
-My friend has just joined Better Homes. That means they have business (NOT CHARITY).
- My wife's cousin just joined another property co in Barsha. they gave him a visa+car+.%. He sold 4 villas in 1 month (not as good as before but 4 villas a month is not bad at all)
- I was called by another British agency asking if i know any sales ladies!
The market is still doing relativel y well. Let me tell you that i warmly welcome a further decline in prices bcz real estate prices are still VERY HIGH by global standards in Dubai. I predicted a sharper decline but the drop was not as steep as expected. The prices in Dubai were absolutely crazy and to date, still very high. The demand is still very high and you can see that from the thick sections of freehold in all newspapers esp. Gulf News although it's very expensive to run such ads!
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Heat stroke.
Posted by Paul King at 14:37 UAE time
Steve,
You need to get yourself inside to some nice cool A/C. Reading your delusional reply, it seems you're spending too much time outside in the 50 degree heat. What has your "cut & paste" claptrap got to do with the price of property in Dubai? Stop watching your Gladiators DVD and read the title of this article. This has nothing whatsoever to do with being optimistic, pessimistic, negative or dreary! It's time to wake up pal and learn to be realistic!
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Steve is a sage
Posted by Mart at 14:01 UAE time
"I for one will wait for this storm in a tea cup to pass. Once the irational stampeding heard has come to a standstill, some will turn around and take advantage of the current low prices; then the stampede will start all over again and that is exactly when I (the rational investor) will sell my property at a massive profit."
Professional stock traders put a stop on their losses by selling if a share falls below a certain price. This is to avoid exactly what Steve does here - rationalising massive losses on the basis that one day by some miracle the global banking system will start producing masses of debt again to fund another binge in Dubai.
Its not going to happen. Dubai's boom wasn't built on the oil price, or some kind of new economic paradigm. It was built on a mountain of credit (that's debt to you and me). The same mountain that saw share prices and US house prices surge, and houses in eastern europe, and Australia and everywhere else.
The debt flowed around the world - we saw house prices, commodities, shares and just about everything else shoot up in price. Then came the inevitable crash, and those who lent the money went bankrupt or were bailed out with amounts of cash that even governments struggle to find.
For Dubai house prices (the same as US house prices, or UK) to boom again all we need is for a banking system that was brought to the brink of collapse by its own idiocy to forget about what happened in the past 2 years and start dishing out money to anyone who will take it once again. Possible, but unlikely. Will the banks really repeat the same mistakes in the forseeable future?
Steve - don't try to rationalise the collapsing price of your property by praying for some economic miracle to come along and flood the world with money again. Sell up if you can, watch the prices collapse, and then if you really want to you buy at the bottom. But there isn't going to be another boom for another 20 years or more - in Dubai, UK, USA, Eastern Europe or anywhere else that shared in the boom and inevitable bust we've witnessed.
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Pros and Cons
Posted by Harry winston at 12:29 UAE time
There are reasons to buy and also many reasons not to buy a property in Dubai or Abudhabi.
The main reason to buy especially in Abudhabi is to avoid paying 250-350k/year to a greedy landlord for a slumdog apartment/villa. If u plan on living 5-10 years in this country i storongly suggest buying a property unless you would like to see a million dirhams gifted to ur landlord.
The sunny weather, expat benefits, tax free status also help.
On the flip side, the quality isnt great for most property ( harsh climate takes its toll), workmanship leaves lot to be desired, property laws are unclear and changing, visa rules keep changing, maintanence fees are ridicliously high.
So me thinks , people should stop whining and complaing. If the life style suits u and ur family go for it. If u prefer the UK, US or Spain go for it. Each to his own .
Overall the UAE has been fruitful to me and m family financially. Therefore i would like it to succeed. The rulers have foresight and vision and will push for a successful resoultion to this crisis after Ramadan.
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Herd Behavior - Vol. 2
Posted by Steve at 09:09 UAE time
Bob, Paul,
Judging by your dreary comments and outlook on live you must be British. The more optimistic among you has long since left your shores to start that little place they call The United States of America.
Here is a little live lesson from my neck of the woods
“It is not the critic who counts, not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man in the arena, whose face is marred by dust and sweat and blood, who strives valiantly ... Who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never known neither victory nor defeat”
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Watch with interest
Posted by Carmi at 08:25 UAE time
The upcoming collapse of the UD Dollar!!!!! Now that's something to watch out for and the far reaching consequences that will have for all.
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Problems Over
Posted by John at 08:21 UAE time
Wow 46 UK properties!!!! Any reason you mentioned that Paul or just puffing yourself up. Please give us your view and your opinion, oh you have already done that!!!! You are so wise
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Repetitious Drivel
Posted by Louie Tedesco at 08:07 UAE time
Some of the readership pay attention to what we read and also to the comments presented our fellow armchair journalists.
We have read cut-and-paste comments from Omar over and over again about the "boom" continuing in Dubai. Please have the courtesy to write comments specific to the article at hand instead of exposing us every week to previous comments, cut-and-pasted again, about full shopping malls, rising real estate prices and supportive banking practices. The six-plus "FACTS" that are alluded to, are fantasy.
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history?
Posted by Mohamed at 04:31 UAE time
Boom and bust are cyclical.
While each market have their own advantages for price appreciation (Singapore, Hong Kong, Manhattan as islands, London, Paris, NY, Tokyo as dense metros with constraints on developments, etc), its given that all markets will go through a period of rising and falling prices.
If you have a situation where there is a "bubble", then you cannot expect a recovery to your "highs" before the next inevitable cycle of bust settles in. Case in point - most ASEAN capitals, especially Bangkok, which even after 8 years, has not recovered to its 1996 peak. That was also fueled by speculation and low lending standards by banks and followed by a crash in world markets and their own stock market fall. Eerily similar to what we are facing now.
But Dubai need not be like Bangkok.
I hope the authorities will take steps to promote Dubai as a home rather then as an investment. When a person has ties to the place, he/she will take a long term view of the prices.
Everyone will have to be pragmatic. I believe it will take a long time before you see prices to the peak of May 2008, but with a horizon of ~ 3 years, and with more investor and residency friendly rules, the picture will look a lot more rosy.
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Posted on Monday, 15 June 2009
Dear Steve
Posted by Dan at 00:02 UAE time
I must congratulate you if you see the current Global financial problems as a storm in a tea cup. Then again maybe your tea cup is the mother of all tea cups.
By the way, a property or anything else for that matter is not worth what the owner thinks he can sell it for, but what buyers are prepared to pay for it.
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Problems over.
Posted by Paul King at 21:47 UAE time
Unpack your bags everyone, problems are over! Just follow Steve's advice because history always proves him right. Don't worry about the fact that the Dubai Real Estate market has very little history, Steve's always right. Don't be concerned that after a monumental rise in value to 1990, Japan's property values have never returned to what they were. Remember Steve's always right. Stop complaining about the absolutely horrendous quality of Dubai property, the next crowd with dumb money are on their way. Also, stop worrying about the fact that we have no idea what the true demand for property in Dubai is, the speculating circus will return. Just ask Steve! Brush under the carpet the ridiculously high interests rates, non-existent professional regulation of agents, non-existent planning rules, hopeless maintenance, the upcoming collapse of the US dollar, dwindling population and more "white elephants" than, well a white elephant farm! Don't worry for a second more, Steve's always right! Meanwhile, i'll struggle by with my 46 UK properties. What the hell was i thinking not purchasing a property in Dubai!
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