Up to $30bn in Dubai 2012 property deals in cash

roulette russe Saturday, 2 February 2013 11:08 AM - Italy

@ Clean Steve, good theory but very risky. Would you take a loan and go to casino to bet in one go? that is what you are doing. on top of that EU and US authorities will get tougher on their citizens bringing money back from UAE. They don't need to push local authorities to control money laundering (for geo-strategic reasons for the moment, things do change in politics). They will just monitor the money their citizens bring from UAE and tax them heavily. So who ever has not transferred money via official channels will have to explain. This in case you don't lose it before due to a new change in law or market collapse. It is unwise to play with your life economy in a opaque market.

John Thomas Friday, 1 February 2013 10:37 AM - UAE

At "Clean" Steve - your theory needs a good scrub and a lot of bleach!!
Firstly - Why would anyone in their right mind take a loan in Europe to invest it in Dubai?? Perhaps if the person have severe mental issues! Why take a loan out where there are "real laws" and real foundations to invest it in sand castles that can be washed away the very next day when someone wakes up and decides to change "the laws" yet again?? Doesn't seem like a good and sound proposition to me; does it to you?!

Secondly - you are deviating from the core subject which is "dirty money" and we all know where it comes from; try walking around any European Airport with a $1M stashed in a suitcase and see what happens...

Sorry your "logic" is deeply flawed and non-relevant to the subject at hand. Pour some Clorox on it and then come back!

Clean Steve Thursday, 31 January 2013 8:14 PM - France

I have a property abroad and took a mortgage out on it of 700,000 Euros.

The rate to borrow is very low in the Euro zone.

I therefore turned up with 700,000 euros in cash in Dubai, and purchased the property here without a loan.

Is my money black/dirty or laundered? NO!!!!!

Its all in the detail.

Ronald Friday, 1 February 2013 10:39 AM - UK

Nice to know there are some legitimate cash buyers. A top agent told me a wonderful yarn about some Russians arriving on a private jet with so many suitcases of cash they needed three taxis. They bought a building for Dhs120m (20m above the asking price) and sold it a month later for Dhs90m, money laundered, developers joyous and agent in the clover with two whopping commissions. This same agent, when asked would he invest in Dubai property, replied: "Not with my money!"

Red Snappa Thursday, 31 January 2013 4:10 PM - Ireland

It is obviously cheaper to pay cash than buy property on a mortgage unless it's a buy-to-let and the mathematics stack up in terms of the mortgage. service charges and any other add ons are taken care of within the rental amount. Which ever form of home loan you take out conventional interest bearing or Islamic, the lender makes a profit.

I too thought the central bank had clamped down on the origins of large amounts of cash, when it came to depositing it in bank accounts. Or do the bank's just ask you where you got it and accept the answer?

Just when we thought that we were in a new mature and infinitely more structured era of the property market in Dubai, it's reassuring to know that you can still turn up at an estate agent's office with four stout duty free carriers full of currency to buy a villa.

Horseman Thursday, 31 January 2013 1:28 PM - UAE

so it seems that 'flippers' are not the problem in the market, rather people with large amounts of $$$$ whose source should more than likely be looked at rather closely.

Are there not currency controls or declarations of cash in transit!?!? Just a thought ;-)

Ronald Thursday, 31 January 2013 12:21 PM - UK

And what about the elephant in the room, Dubai's reputation for being a money laundering capital? That kind of cash has got to contain a huge "hot" proportion.

nice Thursday, 31 January 2013 11:39 AM - uae

The problem with buying with a mortgage in Dubai is the crazy fees charged. Application fee = 1%. Early Settlement Fees = up to 3%. Interest rates = typically 8% (at the moment despite interbank rates being at their lowest level for years). Crazy other fees = at the whim of the lenders. This might be a generalisation but it really is difficult to see why you would take finance when the costs of doing so are so high. The worry for those with mortgages is that if rates rise globally, at the whim of the bank they will increase these rates even though the margins they are making are already very large. Exit fees and arrangement fees should only really be payable in circumstances where you get a fixed or discounted rate based on a third party determination of interest rates (rather than the banks' own determination)....Sort this out and it'll be a more attractive proposition. Of course, if you'd rather not have people who buy to live...for the long term...then carry on as you are.

Jake Thursday, 31 January 2013 11:38 AM - UAE

That's what we have said all along. People from certain places "park" their cash. Those countries include Iran, Syria, Egypt and the other participants of the Arab Spring. Not really the endusers you were hoping for...