Property & Investment in Dubai: Your questions about the market

[UAE Investor]

Dubai's dire financial forecasts fail to materialise
Lunch-time in Dubai, and it was as if the crash never happened.

http://www.telegraph.co.uk/finance/g...terialise.html

[TerryPop]

As this is the investor bit of the forum....

where do you guys/gals think the market is heading?

There has definitely been a bounce but many properties are still no where near their peak?

For example (these are the ones i know about)

Apartments on the palm that nakheel were selling for 6 million months before the collapse (or between 4 to 5 mill in the secondry market) in 2008 are still in the region of 2.5-3million (marina residences in this case).

Also apartments in Discovery Gardens peaked with mortgages at 1.2 million aed and around 900,000 without a loan facility!!

These are currently just selling for just over 500,000 AED (admittedly still rising)

So..

Is the market going to keep its run and recover to those sorts of levels? is the next few years a definite growth cycle in Dubai property?

Any experiences by you, of 2008 peak prices and where prices are now would be interesting to hear about.

Here's one:

I recall a friend who had a floor of office space in JLT. It was early 2008 and he had a buyer at 1600 aed psf. He didn't make the initial signing of the agreement b/c he was 'too hungover' (he actually told them so)

Eventually they met and he sold, and when the market crashed prices tumbled in JLT to as low as 350 aed psf.

As we waded through the following years of the crisis he would often recall this story and we'd end up in fits of laughter/tears about how crazy the market once was

[Dubai_Steve]

From may 2008

Originally Posted by True Blue

Latest figures from Alineah website indicate current average in the marina of AED1900/ft2 up from AED1500/ft2 in January.

What is the current average now AED 1150 maybe?

[Dubai_Steve]

Sheikh Zayed Road corridor will continue to remain attractive for end-users and investors in 2013, but Jumeirah Lake Towers (JLT) development will be the main beneficiary of the expected economic and population growth in Dubai.

“Given the current infrastructure in Business Bay, JLT will continue to benefit from new business formations with a corresponding increase in residential and retail segment due to its status as a free zone and freehold community which will attract SMEs and middle income professionals and entrepreneurs,” Sameer Lakhani, Managing Director, Unitas Consultancy, told Emirates 24/7.

.......

http://www.emirates247.com/property/...01-31-1.493272

[unknownpleasures]

http://www.arabianbusiness.com/bette...arentID=485958

15 January, 2013

Top Dubai estate agent Better Homes has been running false information on a number of its property advertisements, an investigation by Arabian Business can reveal.

The advertisements – all appearing on the company’s website – make a number of claims regarding the Palm Jumeirah development, including non-existent shopping centres, access to leisure facilities that were never built, and even claims that the Dubai Metro runs through the development.

.....

^
Says here people were being misled by the advertisements (comments also state not just BH did this)....who's to say this isn't happening all over again.....pushing the latest mega project is nothing more than what happened in the past....this is all about the market...it's important to raise awareness of what has gone on! Good work by AB to expose this....more has to happen.. Thanks for shortening the quoted article Parisian Girl, I should have kept to the rules but saw someone else's quoted in full above and thought it was allowed on here

[Pleth]

Originally Posted by UAE Investor

Dubai's dire financial forecasts fail to materialise
Lunch-time in Dubai, and it was as if the crash never happened.

http://www.telegraph.co.uk/finance/g...terialise.html

Absolutely!

[True Blue]

Originally Posted by TerryPop

As this is the investor bit of the forum....

where do you guys/gals think the market is heading?

There has definitely been a bounce but many properties are still no where near their peak?

For example (these are the ones i know about)

Apartments on the palm that nakheel were selling for 6 million months before the collapse (or between 4 to 5 mill in the secondry market) in 2008 are still in the region of 2.5-3million (marina residences in this case).

Also apartments in Discovery Gardens peaked with mortgages at 1.2 million aed and around 900,000 without a loan facility!!

These are currently just selling for just over 500,000 AED (admittedly still rising)

So..

Is the market going to keep its run and recover to those sorts of levels? is the next few years a definite growth cycle in Dubai property?

Any experiences by you, of 2008 peak prices and where prices are now would be interesting to hear about.

Here's one:

I recall a friend who had a floor of office space in JLT. It was early 2008 and he had a buyer at 1600 aed psf. He didn't make the initial signing of the agreement b/c he was 'too hungover' (he actually told them so)

Eventually they met and he sold, and when the market crashed prices tumbled in JLT to as low as 350 aed psf.

As we waded through the following years of the crisis he would often recall this story and we'd end up in fits of laughter/tears about how crazy the market once was

This is a new phase of the Dubai Property Market and it is now driven by real world market intelligence. In the early years the only information we had on developments were "location" and "developer status", the developer either being an independent private entity or a government owned entity.

This has all evolved now and has grown new shoots. In the examples you refer to above one of the key factors in the suppressed growths is the name NAKHEEL. There is no other reason on earth that Marina Residence on the Palm should be so cheap other than it is developed by Nakheel.

Nakheel now means complete uncertainty and guaranteed surprises, the unwelcome type of surprise. They have the lowest customer satisfaction record and are well known for bully boy tactics. RERA promised they would make them comply with the JOP regulations but have only had limited success to date. Nakheel were also known for having a poor regime of controlling their contractors. They did not pursue quality, had a bad payment record and today many of their developments are plagued with defects.

Emaar on the other hand are seen as being the polar opposite of Nakheel. Their villa and apartment developments are maintaining value and growing well. Their customers are far more content with the services and management of their communities.

The market for well run communities will continue to grow and others will remain stagnant as the residents seek to relocate from their woes.

[Spurs]

Could say the same for Dubai Properties who never built the promised beach park / gyms for JBR and are clearly in bed with Empower who charge ridicules amounts for the air-con. I doubt their customer satisfaction survey scores very high.

[unknownpleasures]

You cannot relocate if you paid and there is nothing to show for it...that's where most do not seem to realise as it hasn't happened to them...Those who were lucky to invest and got something completed were plain lucky that's all it was...if the shoe was on the other foot then what? What would you do?...there is no remedy, the laws there are in the making and will never be enforced no matter what!

RERA were to do a lot of things and it all sounded good, but alas all PR stuff or just what the media vamped up...I recall reading something way back where it said "RERA to clamp down on developers"....... this didn't happen and the developer still has the upper hand....RERA are toothless, their RealPoint appointed inspectors are another joke...from screampoint to realpoint! All they do is change their name as they have done nothing to improve...Escrow accounts are still being abused or were never in many cases not enacted when the law was brought in ...this was 2007...it is now 2013...where's all the money gone where projects haven't been completed just "scratched" at with holes in the ground showing, pretending some work commenced making it now difficult for it to be cancelled .....yet Realpoint/RERA approve all this...what ever happened to the construction based plans...all is a joke for those hit hard with being ripped off....RERA also said they would provide a list of cancelled projects, more spin and no action! The CEO needs to be booted for non performance...it's govt and this is what you get...no accountability whatsoever! The lands department is no better they do not respond to any complaints nor does RERA and where was this pro bono scheme they said everyone (all investors) was eligible for...once again a PR exercise to show off but nothing came to any fruition!

[unknownpleasures]

Just had a look...."Buy property at Jumeirah Beach Residence (JBR) and you’ll have it all" <<<<<....All or absolutely nothing is what it says between the lines!! Anything to suck people into believing what they say is the gospel truth!......I didn't think stealing from people was allowed in a country like this...don't they cut hands off...my friend was told in 2007 that you could park cars on the road and not one person would touch them, if they did their hands would be cut off? True or false? So if this applies to vehicles the same should apply to real estate!

http://dubaipropertiesgroup.ae/en/pr...each-Residence

[True Blue]

Originally Posted by Spurs

Could say the same for Dubai Properties who never built the promised beach park / gyms for JBR and are clearly in bed with Empower who charge ridicules amounts for the air-con. I doubt their customer satisfaction survey scores very high.

The biggest factor suppressing property prices at the moment is not the availability of mortgages. Its the liability of the controlling developers.

RERA needs to grant the rights that it promised so that Owners Associations can take control of the communities and Jointly Owned Properties. I am not aware of any freehold developments that have been relinquished by the developer. Hardly freehold under the circumstances.

I am beginning to believe that Dubai will never relinquish control of the properties so they will never be true freehold property.

[Pleth]

Originally Posted by Spurs

Could say the same for Dubai Properties who never built the promised beach park / gyms for JBR and are clearly in bed with Empower who charge ridicules amounts for the air-con. I doubt their customer satisfaction survey scores very high.

You are so right.

[v8_]

Dubai real estate sector has recorded a price increase of up to 30 percent in the premier locations during 2012, according to Hamptons MENA, the premier property services company.

source: http://arabia.msn.com/news/business/...cord-growth-h/

[UAE Investor]

Originally Posted by v8_

Dubai real estate sector has recorded a price increase of up to 30 percent in the premier locations during 2012, according to Hamptons MENA, the premier property services company.

source: http://arabia.msn.com/news/business/...cord-growth-h/

Yeah sale,our man here has done well there....

[True Blue]

"Although, the overall market is still seller-oriented"

That has always been the case in Dubai, prices are completely artificial and made up by the sellers who mainly just fly kites.

It is difficult to understand what the real values are and I get the feeling the Central Bank feels that prices are dictated by seller speculation and market hype. Hence the recent decision to circulate notice of a mortgage cap, a form of warning that the Banks could be left holding the baby again.

When investors see the market hotting up, they start listing their stock at unrealistic levels to see if anyone will bite. They are creating the bubble and once it bursts they are well placed to re enter the market and buy up the discounted or distressed units in the prime areas.

Sensible investors need to analyse the market, remove the effects of the peaks and troughs and determine a fair straight line growth factor. Once that has been established the investors will be able to determine if the property is over or under valued and whether it presents a buy or sell opportunity.

[unknownpleasures]

My question about the market is who is this mob >>> http://onvizio.com/

[unknownpleasures]

http://www.emirates247.com/news/rela...01-30-1.493112

Where are these projects they claim ....why don't they name them?

In the base prospectus, released on January 17, Real Estate Regulatory Agency, the regulatory arm of Dubai Land Department (DLD) said 187 projects have been completed since the beginning of 2009; 253 projects are on hold; 232 projects are likely to be completed in due course......

No information was given on cancelled projects. But it was reported last year that 217 projects had been cancelled as of May 31, 2011.

A total of 154 projects had been reviewed under the Tayseer programme, launched in July 2010, of which 40 projects qualified under the required criteria.

These criteria require that projects have adequate infrastructure planned or in place; the escrow trust account is properly managed and financial reporting is full and timely; the technical report must show that a minimum of 60 per cent of construction is completed and that a minimum of 60 per cent of the project is sold.

[Dubai_Steve]

Rents in Abu Dhabi's prime areas have risen by as much as 25 per cent over the past six months as the city experiences an influx of Abu Dhabi government workers living in Dubai.

According to the property agent Cluttons, average rents in some of the city's most exclusive areas have increased by 10 to 25 per cent during the past six months, following a decree last year that could result in government departments cutting housing allowances for employees living outside the emirate and as renters flock to newer schemes.

http://www.thenational.ae/thenationa...ate-from-dubai

[unknownpleasures]

http://www.arabianbusiness.com/uae-d...ml?tab=Article

The real estate industry is concerned that the quick turnover of properties still under construction causes prices to escalate based on speculation, while buyers risk being defrauded.

“Real estate developers like flippers because they make money; if you ask the banks we like genuine buyers who use it for his own home, that’s what will really stabilise society, [when] everybody has a house,” Al Ghurair said.

About time the RE industry practiced what they preached! A flipper cannot sell something on their own now can they without the assistance of the people they first purchased from right? The nationals don't flip properties, they would have access far greater than anyone else, interesting comment made there on this article!

[unknownpleasures]

http://www.emirates247.com/news/emir...02-06-1.493973

Only one out of the nine properties that went under the hammer at the first private auction held by Dubai Land Department (DLD) was sold, people present at the auction told Emirates 24|7.

The only property sold was a residential apartment in Dorra Bay in Dubai Marina. It was purchased at the listed price of Dh1.6 million.

“There was only one bidder for the property,” a property agent, who wished not be named, said.

The land plots were on Palm Jumeirah and listed for Dh13.187 million each.

“Since it was a full house, we though all the properties would be sold out. But all were there to see if people would by at the listed price. Unfortunately, there were none,” the agent

Last week, Emirates 24|7 reported that the DLD will no longer be holding auctions for foreclosed properties, but will sell properties for developers and unit owners through private auctions.