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Old January 30th, 2005, 06:21 PM   #1
Dubai-Lover
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Your Personal Property Investments & The UAE Real Estate Market

actually there have been so many threads about specific questions on specific properties like towers.

in my opinion it has become too much and a lot of double threads have been created.


this is why i go for a new sticky thread in which everybody is welcomed to ask our members about their views on specific property, private investment ambitions and the property market in general.
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Old January 30th, 2005, 09:41 PM   #2
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Dubai property rises are steady now

It seems to me over the last 6 months or so Dubai property prices are pretty steady. I think the days where people made 30% premium quickly are long gone. The max increase in the last 6 months seems to have been about 10% and that on only good projects. What is the price per sq ft in dhirams for apartments in the Marina and JLT at the moment ?

Are the signs of prices rises still good for those out there in Dubai at the moment ?
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Old January 30th, 2005, 10:05 PM   #3
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Well Horizon Tower has no about 860 Dirhams / 1 sqft.
But it is not thaaaat expensive , and of course everything depends on position and availability...!
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Old February 1st, 2005, 11:26 AM   #4
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Given that with the new Dubai Waterfront project there will never be a shortage of land or accomodation surely the market will now be saturated with developments. My view-you will only ever find appreciation of value of property at inflationary figure (ie how much more a building is costing to build, given labour rates and material rates). The "X factor" will be location and reputation of certain devlopments which will be "must haves" such as the Palm and the World...

Its a pretty tall order to find up to 500k people (allowing for 2 people per household and say another 1 million new units of housing) willing to either buy holiday homes or to move to Dubai and secure large income jobs)-this is unless the country becomes kind to people with "funny money" and therefore becomes an undesirable place to live anyway...I for one am really disappointed that the new scheme has been announced when so much property is still on the market today..
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Old February 1st, 2005, 12:32 PM   #5
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Kamal, remember that it will be at least 5 years before the waterfront phase 1 is complete. By that time it will be a more popular place with the western world and DubailLand will be going strong. So prices will continue to rise as more and more come in. (Build it and they will come) Where else can you buy an apartment overlooking a marina and in walking distance to beautiful beaches for less than 200,000 US $ Price will be rising in 2005 and onwards for sure.
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Old February 1st, 2005, 12:40 PM   #6
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I went though the same process in the late 90s when I worked for a telecomms company who are a provdier of bandwidth-they used the same formula and are now almost worthless..ie they put more fiber in the ground then anyone thought people would need for 5-10 years and then allowed even more room for expansion-providing almost indefinate bandwidth. The idea was that the more they provided-the more people would want-this is known as silicon economics (as per silicon chip). The problem is that they didnt consider the fundamentals-ie who was actually going to need all this bandwidth-i.e what was the "killer application"

For Dubai the "killer ap" will be industry that will provide skilled and highly paid jobs-I know of no country that is weathy on the back of tourism (which usually provides crappy wages for majortity of workforce for majority of time).

Hats off to Dubai for bringing in Biotech/Telcoms/IT initiatives into play but I cannot find any stats that show the performance of industry (ie demographics of workforce, demand etc). So there is a choice-make Dubai a partyland or provide it with sound economic fundamentals-not sure if you can do both...

Last edited by Kamal (UK); February 1st, 2005 at 01:11 PM.
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Old February 1st, 2005, 02:26 PM   #7
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Is the dubai property market still busy out there ? I hear from Real Estates here in the UK that the market has been pretty slow for the past 3 months. One of the major reasons for this is that its pretty expensive to buy in Dubai now. At least 100k for even a 1 bed and big deposits are required and people in the UK dont have that kind of money.

Just wondering is it the same out there in dubai is the market slowing ?
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Old February 1st, 2005, 07:18 PM   #8
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It could be slowing...buyers are expected to put down a 10% deposit + premium all in one go, and apart from your wealthy investor who has one house for each day of the week not many ordinary buyers can afford to do that. Maybe when companies start financing the premiums the market will pick up
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Old February 1st, 2005, 08:57 PM   #9
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To me, Dubai seems a sound investment:

Take a 1 bed apartment (eg. Bonnington Towers, JL)
85,000 UKP + 6,000 UKP Furniture = 91,000
Renatal income after expenses approx. 15,000 UKP (assuming 70% occupancy)
That means 17.6% return on investment per year! Which will pay of a 100% mortgage (obtained by personal loan + Dubai 80% mortgage) + give you an income which you can use as a deposit on your next property investment!

(I have been doing this and now own 7 properties in only 2 years - starting with no money - ie. deposits obtained from personal loans)

(in th UK youd be luck to get 6% in a depreciating market)

Buy off plan and you can also expect +Min 30% increase in value by completion time.

Remember that the population of Dubai is increased at 21% last year. Demand will soon outstrip supply. The waterfront development is good as it will make Dubai a more desirable place to live.

Where would you prefer to live ? (cloudy smelly bognor regis or the futuristic luxury sunny resort of Dubai)
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Old February 1st, 2005, 09:01 PM   #10
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Oh that's a tough one.. I think I'll take the ex-council flat in Bognor..
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Old February 1st, 2005, 09:43 PM   #11
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Quote:
Remember that the population of Dubai is increased at 21% last year.
I was imagining a big number but that just blows my mind, thats almost as fast as Vegas grows if not more! Is that number official?
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Old February 2nd, 2005, 01:21 AM   #12
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Some quotes from websites on Dubai's population

"The Ministry of Economic Planning projects that the population of Dubai will grow to two million residents by 2010, from 1.2 million currently, placing pressure on the real estate market to accommodate the requirements of the population. Furthermore, the impending ratification of real estate ownership laws should contribute significantly to the growth in demand for real estate."

"Dubai is growing very fast. Dubai's population, which is 1.4 million now, is expected to increase up to 3.5 million by 2020. That means it will almost triple." - Prof. Dr. Ing. Wolfgang Meyer

"The phenomenal growth in the population of Dubai, which expanded by 25% between 1995 and 2000 alone to 826,387, is one of the factors that explains the emirates 10% plus annual growth in GDP over the past decade. For an expanding population creates economic growth just by expanding."
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Old February 2nd, 2005, 07:03 AM   #13
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The Al Fattan Marina Towers are being offered with a 10 per cent down payment and easy instalment plans at the Dubai Property Investment Exhibition this week.
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Old February 2nd, 2005, 11:18 AM   #14
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Quote:
Originally Posted by Dubai_Steve
To me, Dubai seems a sound investment:

Take a 1 bed apartment (eg. Bonnington Towers, JL)
85,000 UKP + 6,000 UKP Furniture = 91,000
Renatal income after expenses approx. 15,000 UKP (assuming 70% occupancy)
That means 17.6% return on investment per year! )
According to all the agents I have spoken to in Dubai (around 7 or 8) the rents in Dubai are currently quoted at 8%-10% per annum of capital value. Remove the sevice charge at 4-8dhs per sq foot and you are down to around 6% which is the interest rate of the mortgage-so no capital is being paid back. This could yeild worsen as supply rises...(dependant on demand-see below)

Quote:
Originally Posted by Dubai_Steve
Buy off plan and you can also expect +Min 30% increase in value by completion time.
- There are plenty of apartments for sale in developments that are nearing completion so why will people pay a premium? If anything the developer may drop prices to get rid of these remaining units and then move on

Quote:
Originally Posted by Dubai_Steve
Remember that the population of Dubai is increased at 21% last year. Demand will soon outstrip supply.
Are these builders/taxi drivers/domestics? or are they people who will be able to afford the rents? No one seems to have the answer. This 21% is likely to be the builders who are building the apartments and developments!


Quote:
Originally Posted by Dubai_Steve
The waterfront development is good as it will make Dubai a more desirable place to live.

Where would you prefer to live ? (cloudy smelly bognor regis or the futuristic luxury sunny resort of Dubai)
I concede on this-but find me an employer willing to pay me the salary I need to take the risk to move and gain a better life than I do in London-I am finding this a tough call!
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Old February 2nd, 2005, 12:21 PM   #15
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I agree with Kamal the rental yield will be around 7% at best. Also if your buying properties at a premium then obvuously the rental yield will be less.

I really think its going to be difficult for Dubai to fill these apartments I can see alot of them being left empty. Also many people have bought to rent out and if they cant rent them out I see them trying to sell quickly.

Its a pretty uncertain market at the moment.
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Old February 2nd, 2005, 02:43 PM   #16
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7% rental yield (after costs) is correct if renting long term. However, if you are renting as holiday lets (eg. 1 week at a time to UK couples etc.) then rental yield will be around 15% That is why I bought Marina Height Tower as it is more suitable as a holiday let being walking distance to the beaches etc. Dont think I would buy at the lakes etc. as I am uncertain if this has holiday letting potential before DubaiLand is finished.

Remember that target is 40Million tourists per year - many of them will want cheaper accomataion than the luxry hotels can offer - thats where apartments come in - but only in certain 'holiday' locations.

Re: +30% increase - I bought my apartment at approx. 100,000 UKP - With rental yields of 15% it is well worth 130,000 to any investor. So I could sell it at 30% premium once complete. I also expect it to doouble in value to 200,000 at least when Marina, Palm and DubaiLand are complete. Although I do not plan to sell as I would prefer to pay of the 100,000 quickly and retire on the 15,000 per year income.

Compare this possibly tax free income to that of a comparable investment in say Bulgaria (another hotspot) where a 50,000 aparmtnet will only give you 4 000 to 5000 per year income.
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Old February 2nd, 2005, 02:50 PM   #17
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I think Jumeria Lakes will be similar to Holiday Lets as in the Marina. Jumeria Lakes is also walking distance to the beach. I think when all complete Jumeria Lakes will be on par with the marina. You get better value for money in the Jumeria Lakes.

I think its very unlikely you'd be able to let out apartments to tourists week in and out also alot of hassle that way.
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Old February 2nd, 2005, 04:22 PM   #18
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70% occupancy at 450 per week = 16380
Can then pass the hassle to an agency at 15% (who also do cleaning between lets) - so net income is up to 14,000 per annum at 70% occupancy

Dont think Jumeira lakes is walking distance to beach (how can you cross Sheik Zayed Road without getting squashed!)
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Old February 2nd, 2005, 04:28 PM   #19
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Jumeria Lakes is 5 minutes from the Marina. Alot of the people who are professional real estate believe the Jumeria Lakes will be a better place than the Marina in terms of living.

In the Marina in the evening its going to be pitch black when the sun goes down.

Also I dont think your gonna get 450 a week rent. Do you have a 2 bedroom or a 3 bedroom apartment ?
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Old February 2nd, 2005, 05:44 PM   #20
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Below is a quote from 'The Guardian' from March 04, which mentions that anticipated rental return for a 1 bed (golf view) is 300 - 400 per week. Since my apartment is higher up and with sea view and rents have since increased in Dubai I can expext 400 - 450 rent per week for my 1 bed (2 bed with pullout sofa)

"What your money could buy

For a remarkably low £65,000 you can get a one- bedroom apartment on one of the lower levels of the Marina Heights tower, just inland from Dubai's beaches. This is the latest property from local developer Saeed, and for £170,000 you get a two- bedroom flat on about the tenth storey, with spectacular views over the coastal strip.

Apartments can be used as longer-term business lets but would almost certainly produce more income as traditional holiday flats. The complex has pools, saunas, squash courts, gyms and restaurants, so expect high service charges, which should be checked before purchase.

Set aside 5 per cent as a contingency for fees when you buy, although there are no local taxes. Anticipated rental return is £300-£400 a week for the smaller flat, and up to £600 a week for the larger one. The holiday season is literally year-round, but August bookings in Dubai are slow because of the extreme heat. Rental agencies will charge up to 20 per cent for manage-ment and bookings in your absence."


ps. why do you think the marina will be pitch black as opposed to the Lakes?
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