SkyscraperCity Forum banner

Your Personal Property Investments & The UAE Real Estate Market

4987556 37795
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.
1 - 10 of 10 Posts
Why Dubai

I'm a looong time reader here- thank you all for your contributions.

I've also been investing in Dubai Real estate since 2004 for richer or for poorer :)

But when I review this ten year stretch, it really hasn't been comparable to Europe for us in terms of capital appreciation.

In 2004 and 2005 we bought:

Offices (cost aed 800/psf sell today 1000/psf),
1 beds (cost 590k each, sell today 690K)
5 Apartments in marina (cost 2.9m each sell today 4.2 maybe)

These units had peaked in 2008 and its worth mentioning the prices they had hit:

Offices were selling at around 1800/psf just before the collapse
Our 1 beds were selling at 1.2 million each
Apartments we have in the marina had hit 6 million each.

If someone had said buy an apartment from us today and sell it in ten years time for a 20% gain. We probably would have given it a miss to be honest.

Even if say, by 2020 prices rise to 2008 peak its still best part of two decades for a very limited return.

I just think with all the risk associated in the region there is not a compelling return for the bold investor, in hindsight.

In fact in some ways the investor is penalised (rents etc)
From the above, if you could time your entry and exit well there is clearly a lot of money to be made, and I know some of you have - kudos to you!

....But we were always told real estate is a long hold play.

In my view Dubai's market is different in that sense.

While there'll be clever winners in this property market, there'll be normal people who have held property here for more then ten years at some point who are still not in profit I guess.

Yet even at current levels, people are saying Dubai is expensive and needs to correct.... Why invest?
Regarding capital appreciation it looks like you need to be watching for an irrational spike in Dubai to achieve it really. A 2007-2008 type spike.

Basically you need to trade property and not sit on it long term- is what one agent told me- exact opposite of more established markets.

"This is Dubai, everyone is transient and here to trade, you must trade it too"

Too many variables that make this market unique- like the risk of a population exodus, oversupply either by poor planning or a deliberate effort to keep prices low, or even a new regional competitor. No one can comfortably be certain that in 2020 their property will be worth more or even the same as it is now.

Also if we are seeing the first signs of job losses, rents will decline, and as the link from rents to capital value is so acute in Dubai, so too will the value of property decline unfortunately.

And my apologies- I'm not trying to be doom and gloom- I was reviewing our investments now that we have real history (11 years) of holding in Dubai, UK and EU and it just isn't performing here.

It is also capital appreciation that has very much made our fortune in the other markets and on review the one you really want over an extra percentage point on rental yield.

So looking forward we feel we could see no real capital appreciation and potentially a vested interest from the top in keeping supply up and prices down in a volatile region.

Some lucky traders will be saying this is not the case because they have perfectly timed an entry in and exited well (something I don't really wish to do is start trading in and out of property trying to catch irrational spikes).


Incidentally I believe, like many of you also, oil is very much the key to the economy even if it seems not to be.
Thanks to all of you for contributing above- I agree in most part with everything that is said.

We have commercial units and we saw the first tenant leave this year (oil related). With it went the jobs they provided and therefore tenants that the market needs.

Other commercial tenants we have are prepared to push on for another year, not to react so fast and close up shop, but everyone is looking jittery.

For example we are being asked for more flexible exit terms on contracts that are very much priced in the tenants favour due to grandfathering (below market rental rates ).

I think the knock on effect could really rear up next year, where the people who tried to sit this year out and not close down, finally give up.

I wonder if anyone here can call OPEC and say enough is enough before then.

On the bright side, this is Dubai and really the above doom and gloom could go the opposite and the market could suddenly boom again. Who really knows.
@Greenhornet I think that is what I am concluding after a decade to review of this market.

We said we'd sit out the 2008 collapse here, and we did, we held.

It is now 2015, and the market did not correct to 2008 peaks for us.

However it had begun to like we were heading back up and that holding was the right call.

As we started to creep passed our original 2005 prices we started to ease up a bit and gain confidence.

It clearly wasn't just us feeling confident either. Projects like Viceroy on the palm were sold over market rate, showing investors believed come handover in 2017 the market would surpass their above market rate original prices.

I believe everyone holding from 2008 and before was breathing a sigh of relief and the feeling was positive.

But then it slowed. Global events - China oil etc

I believe the true base line will always be extremely low in Dubai of a property's real value, until the transient population issue is dealt with.

I am just seeing that now.

If you want to make money you have to trade and acknowledge the volatility, i.e. catch the peaks.

This is something I could not be bothered with at some cost now I realise!

The dramatic up and down movement of property prices in Dubai is ridiculous but not surprising. Dubai is a transient city.People come and go.They are not encouraged to stay and build a life with visas and citizenships. Properties are not somewhere where families stay for years and build a life.They are just objects to be played with to make money.Even with an increasing population this won't change things and prices I fear will always change drastically. Dubais property market is still very very young and totally immature.
Tenant gave us a cheque and so we signed contract a month in advance for them to renew.

Cheque bounced. Tenant said no no please 100% cash it in a week.
Cheque bounced. Tenant said sorry sorry 100% cash it on the 15th.

And so on and so forth.

Today it is being collected from the bank for the 4th time.

Tenant cuts any calls made to them.

Tenant has a signed contract so is fine for services and registrations.

LL bad, tenant good.
Can anyone advise on filing a case with the police- just to stop the guy travelling.

I am confused do I go to the police first or the courts.

I am now super confident we are dealing with a professional trickster over a a guy in financial trouble, which is why we patiently sat and tried to redraw dates and schedules for them 4 times.

Thank you for the info TB and NoirD I will try both routes but is the police option no longer available for sure?
Ok I'm on it, I'll let you know how I get on- thanks to all...
ring a ding ding

This morning I was on the mobile complaining to my brother about the bounced cheque hassle -when he cut the line.

He called me back a few minutes later and said that no, he definitely didn't cut the line, but in fact the conversation had continued for him.

My side of the conversation repeated itself (me talking only) 3 times. About 40 seconds of conversation each time.

He said initially he thought i'd forgotten I'd already said things so tried to answer me.

But on the third time he ignored me talking and asked me to say the numbers 1,2 & 3. When I didn't he realised he was hearing a recording on an indefinite loop and cut the phone.

The moral of the story is don't discuss bounced checks on an iPhone? :cheers:
By "innovative businesses" do you mean things like ?

Apparently based in Dubai, and recruiting ex astronauts for massive salaries according to the Daily Mirror!

👨‍🚀😁 whatever next.

Also has anyone noticed increase in traffic and businesses opening in Dubai? I wonder how the freezones are faring. We've seen lots of innovative type businesses making a mover here. Is that just a tax thing?
  • Like
Reactions: cguria
1 - 10 of 10 Posts