UAE developers in crackdown on property 'flippers'

Sona Ram Saturday, 2 February 2013 4:55 PM - UAE

Collapse in 2008/09 was not specific to any country or city; even matured countries like USA, India etc. had faced the impact. I know also some people who made money in properties in Dubai. The only difference between these people and others was "GREEDYNESS". My only suggestion is "be cautious and be prudent".

Ali Wednesday, 30 January 2013 11:03 AM - UAE

I tink people are underestimating the number of cash buyers and how much exactly they bring into the country and invest in property deals. Bloomberg has a report on how there are so many Iranians and Russians (And also Syrians, Afghans, Egyptians etc) who buy property with briefcases full of cash. Needless to say, mortgage restrictions etc. wont affect them at all. Their countries may be a bit poor, but there are thousands of smart businessmen in those countries who think and buy in millions.

The Consultant Wednesday, 30 January 2013 3:18 PM - UAE

Ali,

Leaving aside the guesstimates of how many cash buyers are out there, you seem to be suggesting that it is a good thing for the market for there to be a signficant number of foreign players who turn up with suitcases full of money. Allowing people to buy property in this way is tantamount to putting up a neon sign saying "please launder your money here". Most offshore jurisdictions worked out years ago that hot money can flow out just as quickly as it flows in, leaving the risk that property prices will be ramped up (again) to unsustainable levels, only for these cash buyers to pull their money out when the next big investment opportunity arises, leaving behind a legion of genuine buyers who have paid too much for their properties and a bunch of small-time speculators who got into the market too late. And a whole lot of trouble for anyone actually trying to live and make an honest living in the real Dubai economy.

Sadly it looks like people have very short memories.....

Ahmad Wednesday, 30 January 2013 12:46 PM - UAE

Ali

Certainly there are some cash buyers, but there are not minority. The evidence is that when the banks stopped lending the real estate market collapsed. So cash buyers are few :)

Then Iranian and Russians consitute less than 5% of the owner of properties in Dubai 80% indians and Pakistani FYI.

please check your statistics well

I can see lots of criticism here with no ground. Investors should do risk assessment on the country, on the industry, on the company you are buying from, if you do a wrong investment decision then it is your issue, don't blame UAE or the institute ( what you see is what you get ).

You know this is not a developed country and the rules and regulations are not very mature and in reture you get better return compared with a developed country subject to a good investment plan.

So the stupidity is dealt with accordinly :)

Ronald Tuesday, 29 January 2013 3:27 PM - UK

Like all Ponzi schemes the Dubai property market will one day simply collapse because the new money has dried up. Emaar is just as guilty as the rest and the 40 per cent is a myth, because letters of credit are being used and trade offs with other investments in sites not being developed are common. Beware, Dubai property is nowhere near a safe investment. Probably never will be, given the repeat of mistakes.

Hisham Wednesday, 30 January 2013 10:27 AM - UAE

It still continues to amaze me that Westerners see Dubai as some sort of a temporary thing. Probably because in most Westerners' minds Arabs aren't supposed to build beautiful modern cities. The reality is Dubai and other cities in the region will continue to grow. Another reality is the only drying up is currently happening in the West. Accept and embrace this as this is the reality of the future.

Jack Wednesday, 30 January 2013 12:43 AM - UAE

In theory, you could apply your Ponzi scheme statement to every market in the world! How many property markets do you know of that have only followed an upward trajectory since their formation?
Could you also clear up a few questions I have in relation to your opinions.
What do you mean by 'new money'?
Emaar are guilty of what exactly?
What is a 'safe investment' in your opinion? Does such a thing exist or is it just relative to the individual person/group?
Much appreciated, thanks!

Red Snappa Tuesday, 29 January 2013 2:32 PM - Ireland

The problem is the balance between buy-to-live people and buy-to-let-sellon-flip etc, a mature market has a much greater equilibrium between the two.

Frontier markets, will always suffer predominant speculation, when the end product is persistently sold off-plan to help fund construction. It is the same old trap, remembering that the only way Dubai's property market was driven to such dizzy heights in the first instance, was mass speculator activity.

We're back to the Malaysian formula, Singapore as well I believe. You buy a property and if you sell it within 5 years you pay a levy for doing so based on a sliding scale, weighted so that the rate is massive if the buyer's trying to sell within months, decreasing as he or she gets closer to the 5 year threshold.

Pay 40% before you can sell is no deterrent, would an Emaar sales person balk at a speculator paying 40% down up front, I think not?

Finalise the mortgage cap scenario and attract more end users, speculators blow bubbles!

Anon Tuesday, 29 January 2013 2:29 PM - dubai

Typical media nonsense. Most of the speculators are GCC nationals and nobody is going to stop them from making an easy buck.