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Investors fear UAE property market has yet to hit bottom
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 30 June 2009Posted on Sunday, 5 July 2009
Rent increase
Posted by Dod at 10:31 UAE time
I don't feel particularly grateful Paul:
Just before completion of my first year they sent a circular to all tenants without any regard for the rent cap to say that all rents would be increased by 50%, causing a lot of stress for tenants. Some took them to the rent committee, I sat down with them and agreed a 13% increase. So I went higher than I needed to go in good faith because I conceded that rents were increasing.
These properties are 30 years old. and they are getting double the rent they received jsut 3 years ago.
The RERA index is a joke. MY landlord is renting to new tenants at 20% below the lower band amount that RERA quotes for our units, so the Landlord knows the benchmarks are BS but still quotes them and uses them as a base.
My rent is 15% what they are renting out empty units to newcomers. I am not far off what I can find elsewhere except for agents fees and moving hassle, and stress for my family
I know units nearby (my old villa) where they jacked up prices from 60K to 170K!!! overnight after splashing some rubbish quality paint on. Yes they filled the places for a few months, now 50% empty. After the crash they reduced them to 150K. I called them last week and a very worried sounding agent said now 120K.
Serves them right for being greedy. They caused the tenants a load of hassle, cost, stress, and at the end of the day they have gaps in their rentals and they are no better off.
No gratitude from them for having consistent trustworthy tenants
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Posted on Friday, 3 July 2009
yes
Posted by paul at 12:18 UAE time
Dod, you can move somewhere else if you don't agree with it. Of course the reason that you are complaining and won't move is that even with the 10% increase RERA allows, you are still paying BELOW the market rate (or you'd move).
The only reason your rent is going up and not down is because it was (generously) capped by RERA for years at a fraction of the market rate. But instead of thanking them for giving you a 50% discount for two years you are complaining about the fact that this year your discount on the market rate is only going to be 20% or whatever.
Do you really think you have a right to expect the government to force private landlords to rent something at half of market value to you forever? Are you really too ungrateful to see that the only reason your rent is going up is because it was capped at such a low level by RERA for years?
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Posted on Thursday, 2 July 2009
Rent increase
Posted by Dod at 15:35 UAE time
I've just been busted by my landlord who wants to increase my rent by 10% because of the provisions with the stupid RERA rent benchmark. Apparently my rent is low enough below the RERA guide to allow him to try this. Ridiculous how the laws change to allow landlords to increase when the market is crashing. Any ideas?
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omar, some answers
Posted by paul at 11:23 UAE time
Omar, if I might address your points to bearish posters such as myself:
1. Why are you still here?
Well, I was planning on moving my business overseas last year. But then the expected bust came, and to be honest I am loving it. My rent has halved, the roads are emptier and the folks at GSO are much more polite to me when I renew staff visas and so on. My landlord no longer hassles to get me out of the property, on the contrary! Suddenly I am Mr Popular! Why leave now when it's getting cheaper and better for me every day?
2. UAE nationals abroad
I came to the UAE because I have skills that the UAE needs and it does not have among its own citizens. For similar reasons, few UAE nationals end up overseas because there is little demand for the skills they have (or more to the point, don't have). Supply and demand old chap, surely a businessman can understand that?
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Posted on Wednesday, 1 July 2009
Omar
Posted by Amused at 02:00 UAE time
I tohught your were in a real estate office a couple of weeks ago signing the papers for a residence so you could move out of tEmirates Hills, or was it the Green Community? It's hard to keep track when your story keeps changing. Still, I look forward to reading your rants. It seems several folks get their kicks from you. You're a good source of entertainment.
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oooo Omar
Posted by ametis at 01:00 UAE time
Omar, you are quite right, the population of UAE is 80% foreign, if it wasnt for these foreigners do you think Omar would be working on construction sites carrying bricks and mortar..??
Many of the worlds major nations were built by immigrant workers, so remember withoit whom the country will revert to become a ghost town.
God bless the vision and drive of the rulers in the region, creating miracle out of sand.
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Opinions.........
Posted by ametis at 00:50 UAE time
Colin, I am sorry to hear your predicament, I hope you get a satisfactory resolution....
Everyone are entitled to their opinions without demeaning comments..
If we choose to speculate in property this is everyones choice, and bearing in mind puting your money into unproven market is speculation.....even more so off plan...
I bought property because I like the place, and I look at the property as an price pegged accomodation for the next 30 years.
For sure I would pay much more in hotel bills, with my family having a holiday as and when they choose...
And if the price does go up than i have made a wise choice.
Dont forget this is a new country, property laws are changing, infact the property laws here are not really much different to back home in england in the 1950s, it took us many years to force through changes..
The benefit here is that we have a visionary leader in Sheikh Mohammed who listens to the population and responds to conditions quickly...
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Fully agree with councillor
Posted by Omar at 21:45 UAE time
This is a professional insight rather than random opinions! I fully agree with you sir. It's obvious that you are professional and know what you are talking about without any personal judgement!
This forum deserves such input!
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the essence of value
Posted by The Councillor at 19:47 UAE time
who is carrying out the investing and the reasons why are irrelevant...all markets are about demand and supply......Dubai has yet to establish either - nor will do for the forseebale future imho ...good luck to all !!
money can be made in falling markets as well as times of upward growth...as prices fall in dubai, true value's are starting to form....imho wait till q3/q4 2010 for value to be realised in the dubai real estate market...
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What are you still doing here?
Posted by Omar at 16:50 UAE time
You keep on saying that the real estate prices are falling. Ok, i want to buy a villa in new Dubai and am unable to find a good bargain for cash! I am doing this bcz i am 100% sure prices will go immediately after Ramadan (for my own use). They have already gone up by 20%. I can seriously pay you a good commission if you find me a good buy.
Ok, the market is very bad. please i beg you, answer me this question:
This is United ARAB Emirates in the Arabian Gulf. You all come from very far places (different culture, religion, weather, habits, etc...). Why are you here? What are you still doing here?
You think that the future is grim. Why do not you try your chances in another place. You can travel with your passports anywhere without visa. But you do not leave bcz you do not DARE. You go abroad / home, Show off in your town, spend your Dubai money and quickly return!!!!
80% of the population is expats. You rarely see UAE nationals abroad but instead, everybody comes to their country. It's good to be honest and logical!!!
UAE is second to none and we all know that including myself. Had i found a better place on earth, i would not have come originally!
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Jonathan, Ametis.......oh and Omar
Posted by Colin at 15:16 UAE time
Come come now guys.....lets not start a war of words.
As far as property prices are concerned, no-one is stupid. The market is dictated by supply and demand.......not what the media tells us is the price of property.
Everyone who owns a property want to sell it for more than they paid and those buying are looking for what they deem as being a great deal (i.e. lower price than the property is really worth). Again, this is all about perception and other market forces, such as ease of borrowing, supply, location etc. etc.
I for one recently remortgaged my property in the UK, releasing some equity and then looking to invest in the market here in Abu Dhabi. Events have taken over, the recession has hit, I have been made redundant and the money is now ear-marked to keep my carcass out of jail. But the fact of the matter is that I for one believe that the market is far from bottoming out, but if you are in the market for investing, fine.....wait until it hits bottom. If, however, you were of my mindset and simply wanted a place to live where you didn't have to pay a no named landlord a shed load of cash a year in advance.......then yesterday, today and tomorrow are still good times to purchase property here......provided you don't foresee yourself losing you job in the near future!!
All in all......property buying anywhere these days is fraught with risk......just depends how much one can handle and manage without going bankrupt or seeing the inside of a cell for a spell.
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Kidding ye not never
Posted by ametis at 12:27 UAE time
To Jonathan...
How perceptive of yuou to know that I live in cardboard box, several cardboard Boxes...
I have one in Aurora Tower Pent house in Brisbane, I have one in a 7 Bedroom hous that I won in Durham Place Chelsea London, o yes also one in a house by the river in Henley.
Not forgeting the one in a Villa in Dubai..and the one in Lakeside Penthouse in Chicago....
The property market in Dubai is not more insecure than anywhere elese.
Dont forget you only loose on an investment if you sell, and if you are forced to sell perhaps you could not afford it in the first place...and was just another profiteer, anals of histtory are litered with profiteers who just did not know when to jump...
As for being in Dubai, if you cant see the true beauty and benefits of UAE, than you just cant see..
For the record I live in Dubai and have done so since 1979 on and off, have been here permanently for past 5 years, lots of benefits, like all places in the world for every gain there is sacrifice..
I have very discerning taste am also very fortunate to be in Dubai out of choice and not seeking that tax free salary to live the artificial glory life...
I am of course assuming you are just another expat on the gravy train that just derailed...
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Omar
Posted by raja at 12:24 UAE time
Omar, Pls come save us, there are so many negative reports and followed by very negative comments.
Save us from these people with your cut & paste......
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Dubai property market
Posted by Madjedi at 12:10 UAE time
I am one of these investors and I say there will not be any recovery until some fundemental problems are fixed:
Off plan market has been killed by the developers, with RERA blessing, with delay in delivery, payment not linked to construction progress, no delivery guarantee and sky high service fees for completed units. The question is why the new property law has not been enacted.
In addition, there are no approved land use and your property with sea view can today very well be surrended by 50 70-storeys towers around you, with zero public area and zero public services.
The promised park in front of JBR has for the time being become a carpark and will, in a distant future, become a new development with 100 new towers.
Parviz
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omar
Posted by paul at 10:19 UAE time
Omar, they are saying bad things about the property market again. Time to put the red cape on and fly to the rescue with some implausible and unintentionally amusing anecdotes.
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