By Neeraj Gangal
Property sales in Dubai fall in the first half of this year by 42.6% compared Y-o-Y - report
Property sales in Dubai fell in the first half of this year by more than 40 percent compared with the same period last year, according to a report.The National newspaper reported that there were 1,724 sales in the first half of this year, which is 42.6 percent lower over the same period of six months, last year, according to REIDIN.com. REIDIN.com tracks property with data from the Dubai Land Department.
Analysts and property brokers believe that prices have started stabilising in Dubai over the past two months.
Late last month, Deutsche Bank said in a report that Dubai property prices and rents recovered slightly in June, signaling that the worst for the sector may be over.
The average house price for apartments and villas rose 6.5 percent month-on-month in June to AED1,285 ($349.9) per square foot, while rents rose 1.1 percent over the same period following a 10 percent fall, Deutsche Bank said in its proprietary price index, which covers 13 locations in Dubai.
However, more than 60 percent of people think UAE property prices are going to drop by another 20-30 percent this year, according to an online poll.
Arabian Business asked its readers whether they thought the real estate market had hit the bottom, with just 5 percent in agreement.
Instead, some 63.4 percent of people thought there was still another 20-30 percent correction to come.
I just don't understand what to believe anymore, I have been looking for a villa in dubai and sharjah and I noticed that in every villa compound there is at least 2 villas available, but the landlords still do not want to put down the price. I refuse to pay more than 100 000 Dhs for a villa in a compound in sharjah because it is just not worth it, actually it is not even worth 60000 Dhs. It just makes sense that there will be a price correction especially in sharjah, where most of its residents had moved to dubai, but the landlords here are either stupid or proud, I will wait it out until september and if the prices do not go down any further I will stick it up in my apartment for one more year and then go back home. As much as I love UAE, I am not about to give my hard earned money to a greedy land lord when I can go back to Canada and put that money as a down payment on a house. But can someone please enlighten me, why have the rents not gone down to realistic figures when more than half of the properties are vacant.
Who is going to believe this?For eg if there were 100 sales last year, do you mean to say there were 60 sales this year??Rubbish...if there were 100 sales last year, this year maybe there were 5 sales!!
Firstly, to correct you: "...but the landlords here are either stupid or proud..." YOU FORGOT THEY ARE ALSO INTRINSICALLY GREEDY AND ARE IN DENIAL OF ANY PRICE CORRECTION OR ECONOMIC DECLINE. Secondly to answer your question: "...why have the rents not gone down to realistic figures when more than half of the properties are vacant." LANDLORDS ARE INTRINSICALLY GREEDY AND ARE IN DENIAL OF ANY PRICE CORRECTION OR ECONOMIC DECLINE. As for a correction from 100k to 60k, well you're probably right, and that property should be priced at 60k or lower. But this takes some time. Not 3-6 months. For the most part, these landlords have enjoyed several years of continuous flows of 1 year checks at ridiculously high and unsustainable price levels; this created a sort of expat subjugation system (expats at the highest levels even),...well it simply spoiled and blinded them. They will stick it out for a few months maybe a year. Then what? no cash flow? and soon the 100k home they were holding out on, 50k may not look so bad after all! :)
Though there are many empty flats, since the landlords and building owners tasted the high price they want to create an illusion of shortage, an arrogance to prove that they are still in demand and of course the greed to earn more amid the downturn. Goodluck!
If you pay the unrealistic price set by the landlords Miam then you will to blame for keeping the prices high. But if you and many others hold off for another quarter then the prices will fall to realistic levels. The power is in OUR hands now, it's up to us to turn up the heat this summer. United we stand, divided we get ripped off!
Dubai's property mavens would do themselves a huge favour if they clubbed together to get some independent and audited research about the market. They may even be surprised that it isn't as bad as it seems. But this stream of unsubstantiated drivel is further destroying the scintilla of credibility Dubai property still enjoys.
They keep on saying that prices will imminently fall and that worse is yet to come over to Dubai. but the FACTS that we are all seeing in our eyes contradict all those predictions: Everything is rising in Dubai. Salik, Parking, Fees, even several airlines adertise of special fares to Europe and Asia and when we go to book and buy actual tickets, they tell you sorry, no more seats so we tell them we are ready any flight, any aircraft any detsination any time but they never give you the advertised rates!!!Same with flats, rents are still incredibly high. Yes, they dropped between 30 to 40% from 07/08 but still very highhhhhhhh!1 bedroom in Greens today is for 75k (20k$$). That's more expensive than Tokyo!-Paris!-California!. Prices of villas and real estate still crazy!!!1 bedroom for 250,000$$ minimum! That's still more expensive than top locations on earth! All prices are not reasonable in UAE but apparently, there is a certain demand for the same reasons i keep on mentioning. Stable security, top notch world-class infrastructure, high price of oil, absolute political stability, second to none leadership of UAE, central geographic location, complete absence of any competition in the entire MEASA region, etc.... I can assure you that landlords, agents are not dumb AT ALLLLLLLL!They are very greedy and shrewd!!!!!!!!!They are still making millions and are not ready to sacrifice a bit! First, they said UAE will crumble in October, then by begining of 2009, then, in March, then, by school end, then, by summer, then by Ramadan, then by 4th quarter but it will not crumble bcz ultra smart people are running this place and manage to control the overall situation extremely well. I want to buy a villa in Dubai simply bcz i live here and it's better to buy rather than wasting my income on rent. Top people in the DIFC with MBAs and PHDs from Harvard, Columbia, Stanford told me that summer will be the best time to buy your property and now it's summer! I am chasing the agents for a property with my CASH but they ALL told me that prices went up versus March/April 09!!20% difference for me would make a huge difference. Now those same people of Harvard, Stanford in DIFC are confirming that prices went up unexpectedly and many of them are saying that prices will not drop again with very few of them are predicting a drop. I do not want to believe anyone anymore but my OWN EYES. As one Pakistani agent rightly told me: Dubai is the only option for investors to invest: I am Pakistani and i can not invest in my country bcz of political / security instability (one day Taliban, another Bhutto another day Sherif another??!! God knows who will come and destroy your stuff!!!, Iran is and will remain in Turmoil, Lebanon is yet to form a government in a year!, Egypt is struggling with corruption, Saudi Arabia is not willing at all to amend its for Saudi citizens only policy!, so UAE is our only option for the entire MEASA region! Landlords are stubborn and refuse to negotiate bcz they know very well that they will be getting new tenants at high prices!20% vacancy or even 30% in Dubai is not something high by business standards. In any country, you see that except in cities like London, NY, Tokyo, etc... bcz they have 20M+ population! Better to buy / rent now bcz after Ramadan prices will rise again!People will come again and again, weather will be fabulous, infrastructure more complete (metro, etc..) and most importantly, the global crisis is ending (as per ALL the global reports). Sometimes i ask myself how come i want to pump millions for a villa in the middle of the desert but when i drive from Dubai / Abu Dhabi i see all these projects done, inhabited, etc.. i realize the great fact/ accomplishment of this country to turn a desert in green golf courses! This is a fact that we must admit. All these communities are an achievement regardless where they are: A country in Africa or eastern Europe would have a stunning naturare / culture in Eastern Europe but with very few people around: Why?bcz it would not have the components! while UAE is desert and the weather is +50 yet you go today to Dubai Mall, Mall of Emirates, City Centre, Festival City, etc... parking is awful/ FULL yet you fight for a parking space bcz you realize from deep inside that what is on offer here is not available else where including our own countries! Prices are rising, banks are lending, real estate agents are working, Dubai / UAE streets are FULL, UAE airports are FULLL, everything is FULL in UAE, Oil price is high. Everyone must make his own judgement!Either you take it or leave it!Either you win or lose!Life goes on! Landlords, agents are very well. Every time i see a real estate agent, they tell me they live in Tiara the Palm, i wonder where they bring the money from if they were not doing well!!Even real estate agents need to pay their own rent, cars, personal expenses, clothes, nothing is for freeeeeeee!!!!they do not pay, they do not get all these things. They have these things, that means they have the money in a way or another! I checked with Smith & Klen, Ocean real estate, Sherwoods, Better Homes, Let'sDrirect, etc.....All of them are doing relatively well!Better than me the Arab American senior management consultant at least!
Dubai's authorities have failed to forbid front-running in sales. The sales figures published are smoky-fake as long as reported sales figures are not sanitized of managers pre-buying activities. As long as selling developers allow the front-running purchase of units, serious end-buyers will stay away from the market.
all this time omar I thought that you were a local, because the way you defended this place seemed so patriot, its nice to see that in a non local but at the same time I thought that an american arab person would have a better judgement of people and facts just for the fact that you would have had more exposure to con artists in the states, what I mean that you can not be serious about believing that just because a real estae agent tells you that he lives in burj dubai that he is actually honest. Anyone can look rich and especially in dubai, but that is beside the point because you can not determine the value of property in a country by how the real estate agents look, where he lives, or what car he drives, who knows maybe he has a sugar mama paying for all that.... You are right about uae being the best country in the middle east to live in terms of security and integrity, but that doesn't justify the prices of real estate now, and an economy that is not built on the correct fundamentals will have to correct itself before it grows. We all know why the prices got to this point in the first place, with property flipping when the properties were still on paper. As to you going around to buy a villa with cash, good luck, but I would advice you to consider other options of investment for your hard earned money. to toby and danno you guys are so right, landlords are greedy and I will wait it out, united we stand toby :)
Transparency and clear laws are the only way Dubai can come out of this REAL estate mess. How come there is no news published regarding the recent arrest of Al Barakah Group? I have read only one small article in The National website?!?!? This man has allegedly lost hundreds of millions from the investors' money!!!