Time to stop the madness
Posted by Tanib, Dubai, United Arab Emirates on 4 November 2008 at 18:01 UAE time
The cost of renting in Dubai is getting out of hand, especially if you do not get a huge housing allowance from your company. This is affecting people across the board, the Government are clamping down on people sharing villas and apartments, where are these people supposed to go? Even studios are an average price of AED 60,000 per year and for some people that is more than either half their salary or even exceeds their salary!! How can it be possible to live alone, save money and have any kind of decent life here if you have to pay this much out of your salary just to have a roof over your head, especially with the rent payment schemes as they are, either one, two or three cheques, wherein the rest of the civilised world you can pay monthly. There is going to be a massive gap in the workforce if this carries on like this!!!

Does not sound right
Posted by Bloke on 4 November 2008 at 17:47 UAE time
I am from the positive side of the fence on the property price issue and I think only in two to three months time will we really see what direction Dubai goes. I think a lot of it comes down to whether speculators hold their nerve or not. Market confidence is a key factor.

I wish the rents get stabilized.
Posted by muhammad irfan, dubai, U.A.E on 4 November 2008 at 17:07 UAE time
I wish the rents stabilize but the problem is the landlords have made it a habit of increasing the rent between 15 to 25 % on an average. The property market might be going down but not the rental market as the demand is still outstripping supply. On average two families live in a two bedroom flat in the UAE. Exceptions are there, like the high earning people, but they are not even twenty % of the total population. The rents should fall by at least 60% to make it affordable.

The article is out of date in terms of a trend...that is a FACT
Posted by Simon on 4 November 2008 at 15:58 UAE time

The article is out of date. Factually there 'MAY' have been those growths but 4th quarter, if the truth is told, should show falls off 50% in Jebel Ali, 25% Palm Jumeirah (Villas), Marina 20-40% depending on the development etc, etc.

I own a real estate company and these are the true prices out there...lets say the 'norm'. Anyone can find an example of a property sold that hasn't fallen in price but the vast vast majority have.

I have a vested interest in saying the opposite but the facts are the true. Brokers are slashing their sales staff by more than half and cutting basic salaries. Developers are following suit with more to follow and one bank has forced staff in their mortgage depts to go on 3weeks unpaid leave.

Things are changing very fast and behind the scenes companies are taking immediate actions. These are the facts. If the 'captains' of the ships are worried...when do you think property owners should be?

To be fair I'm very happy with the correction taking place because prices have been far too high for far too long...without justification. Prices have been ramped up by greedy profiteering developers and commission hungry sales agents who know nothing about real estate. The market will be better for the correction in the long term.

Sure there are going to be losers but this was never a 'one way' ticket to retirement. Thise who dived into the market recently didn't take into account a strengthening $US or the credit crunch and so will get hurt most...but they should have looked a little further than the 'goldfish' bowl of Dubai before purchasing something they expected a foreigner to take off their hands further down the payment schedule.

rents in dubai
Posted by homeless, dubei on 4 November 2008 at 13:26 UAE time
The problem of soaring rents in Dubai was made worse by the publication by the government of what the maximum rents in named developments should be, as the same document contained 'advised' minimum rents. Of course the effect of this was to push rents up at least to the minimum, which for my flat was a jump of 80,000 dirhams. Now we hear on a daily basis of landlords kicking people out of flat on the pretext of a family member moving in, whereas in reality they want to re-rent at the higher level. This crisis, and it is a crisis, was engineered from above. Sadly, it will take market forces to correct the situation and that will come in the form of a mass exodus. With the current financial crisis now hitting Dubai with projects being cancelled and contractors being laid off, it will only be a matter of time before rents tumble. inshallah

contradictions
Posted by Paul, Dubai, UAE on 4 November 2008 at 10:40 UAE time

I don't see any contradictions in the reports. These prices quoted are for Q3, which is July/Aug/Sep. Clearly the reports of a sudden crunch in the market start in October and the position now in Nov is of a stalled market.

Since Q3 we have seen the stock market in the UAE plunge 30% led by banks and developers. We have seen oil crash from 147 bucks to around 60 bucks. We have seen mortgage deals cut and new buyers would need to find 35% to put down instead of just 10%. And we have seen prices of offplans plunge 25%, construction projects stall or be shelved and even finished apartments cut 5-10%.

Of course real estate companies will spin it in as positive light as they can. Expect a switch to annual figures next quarter as they attempt to hide large price falls.

rents MUST come down
Posted by john, Dubai, UAE on 4 November 2008 at 08:44 UAE time
the government MUST do something against the soaring rents - it get more and more unattractive to live and work in dubai, especially for manpower from sub continent and asia. who can afford to spend dhs 5000.0 and only be able to get a (illegal) shared accomodation.
rents prices are driven by the greed of the landlords.
dubai government should make it a must that vaccant apartments must be rented out at prices affordable to most people live here. like 1-bedroom for dhs 2500.0 a month and 2-bedroom dhs 4000.0,.. this will stop illegal flat-sharing, make all the empty appartments 'full' --> problem solved. if you hick up that rates too high, you again have the flat-sharing issue - so be moderate

It's a sign of a growing city
Posted by clyde, Dubai on 3 November 2008 at 21:49 UAE time
I had a hunch all along that this is exactly where the situation would be heading.

It's all for the best. Dubai is a growing city, and if you stand in line at the immigration queue while arriving in, the multiple languages of europe, the subcontinent and the east will confirm that people are arriving en masse.

This phenomenon can be compared to cities like Bombay, where at the end, the early settlers owned the land (in Dubai it is the apartments and buildings that came up as freehold).
So as the population increased, the demand for housing did as well, creating landlords and tenants.

As not every one can afford a house here today, rental is the option.
Overall this is good for Dubai, as Rents will come down in this "next stage" - the next stage being where ready propertys are just a little bit more than there are people at present - So lanlords *should* reduce rent soon to at least have occupancy.

But meanwhile as with any successful metropolis, property value will appreciate as the city gets dense and more inhabited.

Dare I say win-win?

Contradistory!!
Posted by SR on 3 November 2008 at 19:09 UAE time

Just last week I read a report saying that property demand is flat, lot of people who commented on it also agreed.
Now we have this one from Asteco (ofcourse being from a broker one can not expect otherwise).
My issue is why are there so many contradictions?