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More than 60% think UAE property prices will fall further - poll
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 5 July 2009Posted on Thursday, 9 July 2009
Re: Dave Smih
Posted by Gomes at 08:49 UAE time
Who's asking you to read Mr. Smith.
The people posting about real estate on this site are either investors or involved in the market in one way or the other. I am sure they gain insight and information by communicating with other individuals with similar interest. This is media and free speach being utilized to its best.
If you can't handle the comments being posted,.. I suggest you go watch Barney - the world is a much prettier place there.
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Posted on Tuesday, 7 July 2009
Unfair !!
Posted by Peter Peter at 22:24 UAE time
I have just heard that some buildings originally advertised and sold as falling within the TECOM zone are now being listed by RERA as NOT in TECOM. Is this true ? When did this happen ?
If this is true this will strike a huge blow to the value of such properties and drive prices down even more.
If this is true it is totally unfair and another example ( like the residence visa issue ) of the totally unprincipled methods adopted by the authorities to suit their own purposes.
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I agree with Mart's last comment+Henry!
Posted by Omar at 13:44 UAE time
I agree with Henry and his analysis. Prices might drop a bit or might not but i doubt very very very much 40%. I am planning to buy a villa in Emirates living for exactly the same reasons mentioned by Henry! Good job! The reason why i am participating in this debate bcz i want to buy a property in Dubai instead of paying high rents. No more no less. Bcz i am an end user, every single penny counts for me and i am trying to save by buying at the right time!I think now is the time!
Mart, i fully agree with you. Prices are VERY VERY VERY High. CRAZY!! They fell 50% but still HIGH. Open today's Gulf News, properties in Manhattan, Los Angeles and San Diego are on offer cheaper than a flat in Motor city in the middle of the city but what shall we do? We live and work in Dubai and i do not want to waste my money on rent. Yes, i am ready to pump a big portion of my savings on a property in Dubai. However, i do not see a big jump in real estate bcz it was a bubble that burst / exploded / call it as you wish! Everything in real estate was artificial!Many made millions some lost, i have not participated in that at all. But all my point is that Dubai / UAE and all its services including real estate will stay (maybe 20-30% less or up or even) but for people who think that Dubai will be a ghost town, just forget about that bcz UAE has very strong fundamentals (Emirates, Jebel Ali, Oil, Gas, Telecom, Free zones, DIFC, shopping malls / tourism, services, safety, security, wise leadership, etc........).
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Another 40% drop to be expected
Posted by Henry at 10:01 UAE time
Two months ago you were able to find a villa in the Springs for less then 1 mln, today you will pay a minimum of 1.2 mln... Is the market bouncing back? Yes and No
Lot's of people who used to be renting in Dubai have seen their chance to finally buy a property in Dubai, although still expensive, a lot cheaper then 12 months ago.
Lot's of people have found a cheaper and bigger place to rent, so people in Dubai are moving around, and people from Sharjah are moving into Dubai...
But, this will not last as people who weren't planning to stay are (finally) leaving, the number of one way tickets out of Dubai doubles the return tickets...
What can we expect after summer, Ramadan? a serious price drope of another 40% till the end of 2009.
I don't want to be negative, I love Dubai but we all need to see the facts as they are (enough good news show in Dubai).
Another point we should be aware of, maintenance fees might increase heavily as developpers aren't able to sell their properties but still have to maintain them...
Keep your eyes open, have a great summer and Insh Allah see you back in Dubai after Ramadan.
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Og give it a rest people!
Posted by Dave Smith at 09:35 UAE time
Do you people who post here not have jobs? All you all seem to do is come and post your comments about property blah blah. Get a life and stop worrying so much about prices falling!
Really!
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Posted on Monday, 6 July 2009
Polls are unreliable even when well designed...
Posted by Luis at 22:02 UAE time
The main problem with these polls is of course that they may be involving an agenda and the people carrying them may be so (convieninty) dumb as to not notice how biased they are.
For example:
"The Dubai-based investment bank found that 19 percent of investors believed that the market had bottomed out."
from the writing I would say that they are referring to "sellers" and they are more like to talk the market up or "owners" who do nto wnt to "price to market" their house (always painful). If this wil work is quite dubious me thinks.
The main one again may be referred to buyers who may be quite cautious about the market state.
And before someone (well, we know who) comes and say that sellers here are megamultimillionaires who do nto need the cash...
Many of the large family funds are heavily leveraged. They absolutely need the cashflows to service their debt cost.
We may argue until we are blue in our face given the opacity of most of these investment vehicles. I work with quite a few, and I see how they are feeling the pressure.
On top of this, the shaky legal foundations are now painfully clear to most expats (who happily decided to ignore them in the past). This will not be changed by a few PR stunts, that in most places would not make to page 10 a serious newspaper (tes I am thinking of Paris Hilton).
And sorry, this is nto the forum but can you show me which countries telecom are dominated by Etisalat? They have built a reputation for slashing prices in every single market they enter. Only exception I could think of is KSA... again we can have a specific discussion on this. I know the industry reasonably welll and Etisalat is subsidizing their losses in the rest of their operations with their monopoly in UAE (do nto get me started with the operations they got from atlantique telecom).
After Ramadan the view will be clearer, lot of fog in Dubai today, in more sense than one.
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Wake up Omar
Posted by Mart at 19:41 UAE time
"Rela estate is just a tool / serice offered and thus, prices will not tumble"
Prices HAVE tumbled despite all the spin. They tumbled for a very good reason... they were WAY TOO HIGH.
You can talk about the new airport creating demand for housing. But the new airport was on the drawing board last year too - and house prices and rents have halved since then. So I think you need to put down your "marketing for estate agents" text book, and pick up the "economics 101" text book.
Estate agents in every market constantly come up with reasons their market won't crash. In the UK they don't have to contend with the prospect of unemployed people going home (since they get unemployment benefit to stay), they claim its a small island and space is limited (not millions of acres of desert to build on) and even so prices crashed in UK too. The reason - they were far too high!
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FYI, i have NEVER believed in real estate
Posted by Omar at 19:19 UAE time
As a management consultant, i have never believed in real estate as an industry. It's just a profession like a painter , etc.. but not an industry.
It's very easy to build buildings and generate a certain return. Is a business that usually generates 7% gross income (Net is lower since they have to pay service charges) a good profitable business. I do not think so! I would rather work in something productive. The least thing i believed in this great country was real estate. A factory, an outlet, an airport, a financial centre etc.. would be more productive. Since my first visit to Dxb in the early 1990s, i believed in Emirates airlines successs story, in world trade centre / exhibition centres, Jumeirah hotels, Jebel Ali Free Zone, and other productive items. I recently visited a friend who has some properties for rental in the Greens area and asked him about the situation and his answer did not surprise me!!!He wants to build a gas station!!!! He said he would make sure that he gets some cash every single day no matter what!
Today, i was in a meeting with top people in the telecom. industry and we reviewed how UAE is building another energy jewel called telecom. Today, UAE dominates the communications of 21 countries across the globe. Imagine Internet, mobile, sms, mms, broad band, roaming and ... income. That's more productive than the entire real estate.
For Jon, i say: Sir: Are you underestimating Fly Dubai. A good portion of the Dutch economy is based on Amsterdam Schiphol airport!! When easy Jet considered moving its operation from Luton to another airport, a European summit took place! The aviation industry including a budget airline represents a major component of a national economy. British airways played a major role in developing the British economy after WWII!Yes, 54 planes of Fly Dubai is a big positive change sir+ it will lead to launching the Jebel Ali airport, the world's largest airport!
Havind said that, real estate will remain in demand across UAE bcz all those people who come to work for Jebel Ali airport, Etihad and others need a place to live. Also, do not forget Fujairah! It will be one of the world's oil ports soon+ its fabulous beaches in Al Akka! Sometimes, non-interesting things survive and make money!!!As for Paris Hilton, she is just a PR tool and was used as an example for new things only.
All the above will keep UAE highly in demand for long decades to come and with the absence of any competition in the enitre MEASA region, the demand will even get higher. Rela estate is just a tool / serice offered and thus, prices will not tumble. A 20-30% decrease or increase would not change things fundamentally. So all these real estate agents will remain and prices will remain high.
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Omar - you need to read the news
Posted by Mart at 19:15 UAE time
"They keep on telling us that prices will fall and we wait but??!!"
Omar - do you read the news?
In the last year Dubai has experienced the 2nd biggest price falls anywhere in the world. Yet you've not seen pricing falling?
Rents for 1 bed in the Greens have fallen from around 120k to 60k or less today. That is a halving of value.
You need to start reading the news!
More and more building projects are being put on hold. That means tens of thousands more expats involved in real estate will be heading home (they can't get unemployment benefit in the UAE). Plus we have some developments finally being completed (way behind schedule).
So where is all this demand going to come from?
You just cannot compare prices here with London or New York. Those are relatively developed markets, that don't have acres of empty desert to build on, and don't have a mass exodus of people who've lost their jobs.
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I think Omar is starting to see the wood for the trees
Posted by biztrip at 18:00 UAE time
C'mon people, let's give Omar a break....he's on a roll today and I want to see where he ends-up! I couldn't help but notice that Omar has changed his course.....he is coming round to our way of thinking! I guess someone somewhere has recently let him down and he has started to realise that Dubai is full of smoke screens!!
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To Omar
Posted by Iam at 17:57 UAE time
Hi Omar,
Do you honestly think that having Paris Hiltion here is a positive image to Dubai? I don't think so. Today I can renew our Southridge one bedroom apartment for only 80 to 85K with 3-4 cheques and a year ago was 130k for one cheque. You are right some of the comments but mostly were fault.
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regarding price of real state will be more down in future...
Posted by MANO at 17:55 UAE time
60% of people who think that prices of real state will come down more, i am sure they dont have any property holding in dubai,they just comment.
if you check all economist and analasit people are normally not very rich but they talk 2 much abt. money
think positive it will happen positive,i believe in people who convert problem in apportunity..........
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To Omar
Posted by Jon at 17:27 UAE time
Omar,
Can you let me know where you buy your rose tinted spectacles? Please don't tell me you believe every word you say?
You forget one thing in your analysis - complete loss of investor confidence in Dubai. A few distressed sales here and there of people thinking they are picking up bargains does not constitute a reversal in the fortunes of the Dubai property market.
Also, it's a pretty sad day when you have to rely on non-events such as a visit by Paris Hilton and the launch of a budget airline as highlights of Dubai.
Get a grip!!
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Specifically for Omar
Posted by OS at 16:08 UAE time
Omar, I follow your comments with interest and find that lately your tone has become rather mellowed. The usual enthusiasm is waning on the real estate market. What's gone wrong mate ? I guess you have woken up and smelt the coffee :) or have a better understanding of the facts and ground realities.
I am not a greedy investor but as an average person want to buy a place where I could live with my family. Guess what, with prices being where they are, it's still not worth it. I live on rent, no interest payments, wear and tear in on the landlord, no hidden charges etc.
BTW, wonder who told you UAE is a tax free country ? The tax departments of UAE are called Etisalat, RTA etc. There is no direct taxation but the indirect taxes are huge. Just because it is called a 'Fee' doesn't change the nature of the levy.
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who is to believe?
Posted by Omar at 15:15 UAE time
1 year back, 99.9% of respondents say that prices will rise in 2009 but they fell 50%!Today, 90% are saying will drop further. We are all confused. Perhaps, prices would drop 20%-30% or stabilize or increase 20-30% but something certain is that the market will not crumble.
I personally do not believe that prices will fall because i can see in my eyes the following:
1- Prices have in fact risen 10-20% in the last 2 months as HSBC-DB and other dealers. Some experts in DIFC kept on denying this fact until several reports covered that fact.
2- Prices of OIL are still very high (65-70$) is still a high price. Taking into account the number of the local population versus the daily oil export by UAE, you can figure out the excess of cash being generated every single day!Real estate is the easiest sector to pump this money into although not the most productive at all.
3- People are still around. The UK, US, Iran, Australia are not better place to invest in. So UAE is still RELATIVELY the best option around+ it's still tax free!
4- UAE has something new every single day (Paris Hilton, Olympics, Exhibitions, F1, Terminal 3, Shower spa over 35,000 feet!, Fly Dubai, Ice Emirates, Etihad, new destinations, etc....
With all honesty, i strongly believe that real estate prices are absolutely non sense in UAE. They are more expensive other top destinations on earth! Sherwoods published ads for apts. in central London cheaper than apts in Dubai!!!Can this be justified???!!
5- Constrcution is going on in full swing around UAE either Dubai or Abu Dhabi or Fujairah: Infratstructure or some real estate projects although it's +50!
Although i hope prices would fall bcz that would make the market more healthier / affordable, i do not think so bcz there are many sharks with lots of cash that can drive the market how they want. Dubai remains a very attractive place if not by global standards, at least by lregional standards and this would be more than enough for a small country / city like UAE/ Dubai.
They keep on telling us that prices will fall and we wait but??!! One agent called me today to offer me a small 2 bed in Greens for 110,000 (that's 30,000$). It's still crazy (more expensive that top int'l standard). I told him, 100k but said No.
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