Predict the prices in 2010

[Gashead]

I get 115,000 gross on a purchase at 1239888, so 9.27% pa. Probably works out at about 8 percent after service charges.

Yield is established on current value not purchase price. I doubt 9% is achievable, with current capital increases 5 % is the norm.

 

[petrometro]

Yield is established on current value not purchase price. I doubt 9% is achievable, with current capital increases 5 % is the norm.

gross yield is a term used to describe rental income in relationship to purchase price. In this case it is 115000/1239888 %
Gross yield paints part of the picture. Net yield completes it. Gross yield is vanity, net yield is sanity. Profit is King, as the saying goes.
Net yield helps you estimate the profitability of a property. The calculation is
Annual Rental Income minus non-interest costs/purchase price.
Costs can include: Occupancy Voids, marketing, managing, maintenance, repair and renewals, local tax. So long as the percentage is bigger than 0 the property becomes cash positive, which is what you want.
What I have calculated is gross yield as a crude indicator. The current value you maintain should be used is irrelevant. If you used Reehan Vs CV now the calculation would be 3.83% and dropping as the CV increases! You would use CV as a function of the return on investment.
Hope that helps. The answer comes from an accountant, trust me!

 

[Gashead]

gross yield is a term used to describe rental income in relationship to purchase price. In this case it is 115000/1239888 %
Gross yield paints part of the picture. Net yield completes it. Gross yield is vanity, net yield is sanity. Profit is King, as the saying goes.
Net yield helps you estimate the profitability of a property. The calculation is
Annual Rental Income minus non-interest costs/purchase price.
Costs can include: Occupancy Voids, marketing, managing, maintenance, repair and renewals, local tax. So long as the percentage is bigger than 0 the property becomes cash positive, which is what you want.
What I have calculated is gross yield as a crude indicator. The current value you maintain should be used is irrelevant. If you used Reehan Vs CV now the calculation would be 3.83% and dropping as the CV increases! You would use CV as a function of the return on investment.
Hope that helps. The answer comes from an accountant, trust me!

Then I stand corrected. But why use the purchase price? My mother lives in a £2,000 house in the UK (at least that's what she paid in 1950).

 

[petrometro]

Then I stand corrected. But why use the purchase price? My mother lives in a £2,000 house in the UK (at least that's what she paid in 1950).

one would assume that your mother still lives in the house so is not receiving an income off it. Therefore her yield would be 0/2000 or infinity! One only uses it for investment purposes to evaluate whether or not the deal is positive or negative in terms of whether it puts money in your pocket or takes it out. Negative yield in a housing market such as we have in the UK is a double problem. You are paying to support the mortgage on the investment property (which most people do for tax and leverage purposes) and there will be no sign of apreciable capital growth in the UK for a number of years.

As an aside; do you know how the Burj Dubai Downtown Emaar Inventory sale went on Saturday? Interested to know what the resale prices in downtown are per sq ft now. Can you find out?
many thanks, Peter

 

[HaiderAli]

R U talking about studio or 1 Bed ?

It's a studio.

 

[Gashead]

one would assume that your mother still lives in the house so is not receiving an income off it. Therefore her yield would be 0/2000 or infinity! One only uses it for investment purposes to evaluate whether or not the deal is positive or negative in terms of whether it puts money in your pocket or takes it out. Negative yield in a housing market such as we have in the UK is a double problem. You are paying to support the mortgage on the investment property (which most people do for tax and leverage purposes) and there will be no sign of apreciable capital growth in the UK for a number of years.

As an aside; do you know how the Burj Dubai Downtown Emaar Inventory sale went on Saturday? Interested to know what the resale prices in downtown are per sq ft now. Can you find out?
many thanks, Peter

No I don't but Betterhomes price lists are as good as anything to gauge current sales prices.

 

[petrometro]

No I don't but Betterhomes price lists are as good as anything to gauge current sales prices.

To a point you are right but like any chart, which I have also seen, prices can fluctuate wildly. I know of a sale that exceeded the quoted figure by over 20%!
The inventory sale is those units that didn't complete due to lack of finance. I am sure they will now have gone but would be interested to see if any old town ground floor were included, especially in the Reehan Community.

 

[FZA]

Hi,

I know this is one of those "who knows" answers, but what is everybody's guesses to what the price per sq ft will be in the following locations in 2010?

(1) Dubai Sports City
(2) Jumeirah Village
(3) City of Arabia

And what would the prices of current locations be by then?

(1) Greens
(2) Dubai Marina
(3) Old Town

Cheers,
Savio

Hi

Could some kindly soul please tell me the current price per sq ft of these areas now (April 2008) and also what the original prices were on launch (and the date of the original launch)

Thanks

 

[Gashead]

For current prices you'll find them all on say Betterhomes web site. For the original prices you'll have to do a lot of research unless you kept old property sections from the papers.

 

[Wannaberich]

Imposible to predict prices as its totally impossible to know when projects will be completed and how many people will move to dubai.
Presently,the situation with material prices rising plus labour shortages is getting worse.
Predictions by the Banks when prices will slow down/correct are irrelevant.

 

[petrometro]

anybody going to the emaar sale on the 26th april at the downtown living centre? Lots of stuff being sold off by emaar- plots that people have been unable to afford the final payment or lost their deposit on. would love to know the figures/ft for this sale.

 

[New_Investor]

anybody going to the emaar sale on the 26th april at the downtown living centre? Lots of stuff being sold off by emaar- plots that people have been unable to afford the final payment or lost their deposit on. would love to know the figures/ft for this sale.

I'd love to know as well, i hope i can invest in business bay but with the current prices i guess it will be only a dream

 

[Sina]

The UAE population is expected to reach 5 million during this year's census 20 times more than what it was in 1971. And the plan is to be tripled to 15 million within the following decade as I have obtained this info from a source "1000 Q&A about UAE" recently. At the same time there are 300 families coming to UAE every week to work and live as this number is officially stated by the Authority of Neutralization and this number is subject to increase; we are not talking about tourists here, neither about Dubai only! Thats a total of 15600 new families every year! which means 15600 new houses need to be available!

In addition to this, people from abroad are investing in the UAE property market by acquiring homes and commercial investments in the most luxurious city in the middle east.

In addition to this the new manifestations that will be offered to tourists will be even more attractive like Sports City which we all know that it is a candidate for hosting the world Olympics 2020. And DubaiLand will be one of the most attractive amusement parks in the world... etc.

I also want to mention the biggest airport in the world that will be built in UAE. Do you think that Dubai International Airport is not able to obtain the number of tourists and residents that are flying in and out hence they are building an even larger airport according to the assessment that there will be a drastic increase in the number of population and tourism.

So in my opinion, according to the facts mentioned above, prices will not go down, but it may slow down or stop rising not for at least another five years; this is my prediction unless the government applies the new rumored law that you cannot resell your property before completion or after two years of purchasing.

Cheers.

 

[mpat]

The UAE population is expected to reach 5 million during this year's census 20 times more than what it was in 1971. And the plan is to be tripled to 15 million within the following decade as I have obtained this info from a source "1000 Q&A about UAE" recently. At the same time there are 300 families coming to UAE every week to work and live as this number is officially stated by the Authority of Neutralization and this number is subject to increase; we are not talking about tourists here, neither about Dubai only! Thats a total of 15600 new families every year! which means 15600 new houses need to be available!

In addition to this, people from abroad are investing in the UAE property market by acquiring homes and commercial investments in the most luxurious city in the middle east.

In addition to this the new manifestations that will be offered to tourists will be even more attractive like Sports City which we all know that it is a candidate for hosting the world Olympics 2020. And DubaiLand will be one of the most attractive amusement parks in the world... etc.

I also want to mention the biggest airport in the world that will be built in UAE. Do you think that Dubai International Airport is not able to obtain the number of tourists and residents that are flying in and out hence they are building an even larger airport according to the assessment that there will be a drastic increase in the number of population and tourism.

So in my opinion, according to the facts mentioned above, prices will not go down, but it may slow down or stop rising not for at least another five years; this is my prediction unless the government applies the new rumored law that you cannot resell your property before completion or after two years of purchasing.

Cheers.

My friend, I think still the figures of 15600 families a year is not enough if you compare with the number of units being delivered every year. Last year international city alone delivered around 60 000 units ( pls correct me if i m wrong ) and Discovery garden is aobut to deliver around 30 to 40 thousand this year. then there is JLT , marina , B Bay , DIP , DSO etc etc etc getting ready in a year or less than that.... Middle and lower class families tend to move towards Sharjah dubai border where around 20 000 units are getting ready this year alone with around 50 to 70 k rent for a bed......

I guess the price rise is only and only becos of inflation and speculation.I m not an expert , but this is what i feel....
Contrary openions are also welcomed.
Bye

 

[Gashead]

My friend, I think still the figures of 15600 families a year is not enough if you compare with the number of units being delivered every year. Last year international city alone delivered around 60 000 units ( pls correct me if i m wrong ) and Discovery garden is aobut to deliver around 30 to 40 thousand this year. then there is JLT , marina , B Bay , DIP , DSO etc etc etc getting ready in a year or less than that.... Middle and lower class families tend to move towards Sharjah dubai border where around 20 000 units are getting ready this year alone with around 50 to 70 k rent for a bed......

I guess the price rise is only and only becos of inflation and speculation.I m not an expert , but this is what i feel....
Contrary openions are also welcomed.
Bye

Surely there isn't 60,000 units at International City??? That's 10x larger than JBR, and all on about 5 storeys.

 

[Wannaberich]

Sina I think your figures are totally wrong.The population is expected to reach 5 million in a few years.Its not 5 million now but only about 1.5.As for 15 million,If it ever does reach that number you are looking at years into the future.
As for the airport,remember Dubai international airport will be a transit point for people
travelling to other parts of the world also.So many of the millions landing there will be there for all but a few hours.
Also sports city will never host the Olympics.Its just too hot in the summer and they won't move it to the winter.The facilities in SC are not enough anyway,theres quire a few more sporting facilities that would be needed.
Where did you hear the rumour regards new laws against selling property?I can't see this happening as it would deter many investors.

 

[Sina]

Thanks for correcting me DoBuy. Should I go and sue that book's author?! Maybe I'll be making more money than from investing in properties!

 

[Sina]

That rumor was about Nakheel projects. So it's the developer's decision, not gov's..

 

[Wannaberich]

Thanks for correcting me DoBuy. Should I go and sue that book's author?! Maybe I'll be making more money than from investing in properties!

Maybe u could ask him why he thinks Dubai has a population of 5 million
when in fact it's 1.5million.
As for the 15million population.I think you or he is getting this mixed up with the figure of 15million being the projected tourists in Dubai by 2015.

 

[Sina]

Ok, I will scan that page and send it to you by email.