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Affordable props

Discussion in 'Dubai property' started by gayle_ch, Nov 2, 2008.

  1. gayle_ch

    gayle_ch New Member

    Any idea about some affordable properties in Dubai. Whatever I came across recently were all way beyond the reach of my wallet. I am sure there must be something for the mid-income segment. Please help me with some information on this.
     
  2. sasherwani2

    sasherwani2 New Member

    Zilch, Zero, Nada! NOTHING!

    All Dubai Properties are from 3X to 10X overpriced. Even junk projects like International City are selling for AED 750K-900K for a single bedroom apartment. You could get a 3 bedroom house with a swimming pool in that price in an "above avg" area in the United States. But dont worry, the prices are on their way down hard and fast. Just wait for 4-8 more months. You will be able to afford properties at decent locations at a decent price. Wait and watch =)
     
  3. georgihh

    georgihh New Member

    That’s correct everything is overpriced but not much available.
    I don’t think in 4-8 months the availability will increase significantly.
    Look for some bargains from now on as already some of the properties are well priced considering the rental income.
    The quality and location is not important as the new developments will leave behind the current number ones.
     
  4. Jeremy.Choong

    Jeremy.Choong New Member

    Jeremy.Choong

    I would suggest thinking about this problem in a different perpect: why price would be so high!!!!
    Price stands something between demand and supply, read newspaper and find out which increases faster, population or property? Price may keep high for a while but never survive if there is not enough demand, so if Dubai runs a population of 1.9 million for now and still increase creazily, I will be quite confident of the price will go higher though market seems going down now.
     
  5. sasherwani2

    sasherwani2 New Member

    Just wait and watch guys...almost 30% of the population depends on real estate revenues (somehow or the other) for their salaries.. the market is on the verge of collapsing...it was destined to with all the greed and corruption...these realestate dependant ppl will HAVE TO go back when they lose their jobs.......
    A studio for AED 2M?? A fools paradise would be more realistic...i think necessary price corrections should be done ASAP before Dubai proves itself to be a dud.

    For those who disagree, i say just "wait and watch".
     
  6. PropGuy

    PropGuy New Member

    What is your budget? And you are looking of off-plan or ready property? You can pm details.
     
  7. Investoman_uae

    Investoman_uae New Member

    I've been readin ur posts recently across the forum. I gota tell u dude, I have never seen someone as negative as you.

    I am strugglin with my intallments but hey am still smiling. You talk about "horror stories" and god knows what.... just relax for a minute. . . have u invested in real estate before?

    Yes there will be a correction, but not a collapse because people will always want to live and work in this country for obvious reasons.

    Inv.
     
  8. allayar_khan

    allayar_khan New Member

    dude, What are you on about???? Which nightmares??? wait and watch what????
    First of all look at the whole world!! USA, UK, Australia, hong kong, singapore, iceland,,india....the whole world is facing crisis and Uae is one of the most stable countries in the world!! Compared to the other parts of the world ,dubai is way better off!!!.. if you dont agree thn invest your own money in uk or usa, or whereevr u think is beter!. Thnks!
     
  9. sasherwani2

    sasherwani2 New Member

    I am free to say whatever I want guys. Yes I have invested in Dubai during the good times but I pulled out just before the market started overheating. I wouldve pulled out a little later and made more but I decided not to be greedy. We can continue this debate forever about the whole world is crashing, this isnt specific to Dubai etc etc etc...but let me tell you something, this global crises is showing the true reflection of their abilities to all markets. In the US housing markets house prices slashed upto 70%. Imagine if you bought a 4 bedroom house at USD 500K , it would be selling for USD 200K. Now imagine the kind of prices in Dubai. All you get for USD 500K is a one bedroom apartment. If you think its realistic, then i suggest you start investing. For me, it needs a well-deserved correction.
     
  10. Wannaberich

    Wannaberich New Member

    Those who panic and say Dubai is about to collapse just don't have the balls to see through these troubled times.
    The world is going through one of its biggest financial crisis ever,Dubai is of course going to be affected.However,its in a much better situation to be able to cope with all the drama.
    Yes at the moment it is a buyers market,people are stalling and waiting to see what happens.
    However as quickly as Dubai turned into a buyers market overnight,it will go back the other way as soon as the worlds economies start to stabilize.
    Reading this report,the news isnt always gloomy.
    Gulfnews: Villa rents soar in Dubai as apartment sector cools

    One thing for sure,although there are many opinions on what will happen with prices in the near future,some say collapse others say they will stabilize.However,in 7/10 years when many of the mega projects are finished,Dubai will be such an awesome place that everyone will want to move there.If you had the balls to hang onto your property and not panic and sell, then it will be certainly be worth alot of money.
    Panic and stay poor or take a chance and be a success.Your choice.
     
  11. sasherwani2

    sasherwani2 New Member

    Those who are pancing are the same people who took a chance =) So are they poor AND successful?
     
  12. shekhar_10

    shekhar_10 New Member

    Notwithstanding the gloomy talks, Dubai property sector will not collapse under the impact of current global credit crunch. Abu Dhabi Govt has already announced that it would pump in its oil money into UAE rather than injecting elsewhere. One of the latest projects to have broken into the affordable segment of Dubai property sector is Axix Residence in Dubai Silicon Oasis.
     
  13. PropGuy

    PropGuy New Member

    Not to my knowledge. Maximum they went down 40%, and prime locations are still earning premium.
     
  14. kennyhubbard

    kennyhubbard New Member

    Sasher,

    I have to agree with the other guys....this is a very negative opinion and you are most welcome to express it....however, your sentiments are a dime a dozen and apart from the fact that the rest of the world is "falling apart", do you have any information that may substantiate your point of view. I say this , not to attack your POV, but rather so that you may present your arguments and we may debate the facts rather than fight over opinions......

    I see several differences between Dubai and the rest of the world and this is what makes me bullish on the Dubai property market. The banks that reduce their LTV's are taking pro-active steps to protect themselves and ultimately this will help the property market. The banks reduce the LTV's because they are worried that their security(ie the property) will diminish in value. In fact, I am not even convinced that the LTV reduction represents a bank POV on the property market but more of a kneejerk reaction to the credit crisis. Nontheless, you don't need to be a rocket scientist to realise that there is some punishment coming to the market. My argument is that this going to be a healthy and moderate correction and will allow for savvy investors to make good deals before it continues its growth.

    My next point is that in America, the crisis was caused by a sick property market(TOO much debt!). Imagine having a property mortgaged up to 125% LTV and mortgage rates that triple:eek: Conversly Dubai has a healthy property market that is being affected by the current crisis. This is a big difference. Capital is fleeing Dubai because it is required elsewhere to stave off disaster, not because it is risky here. Give it a few months and when the dust settles, people will be wondering where to put their money. I wonder if it will be in the USA where they have yet to dish out one dollar of their $700 billion bailout package, or in the UAE where the government decisively and immediately injected liquidity into the market when required. Case in point is Gordon Brown here right now cap in hand seeking financial aid from the UAE.

    One also needs to look at the fundamentals and that is rental demand. There is insufficient rental supply and given the current crisis with developments being cancelled, I doubt we will see and oversupply. This is over and above the governments' open statment that they will never allow supply to become excessive.

    In short, I think the government may step on speculators(ironically the developers like Emaar and Nakheel are the BIGGEST speculators in the market), but if you focus on rental potential, you will not go wrong.

    Any property investment is done in the hope of future profits in the form of either capital growth or income from rent. While there may be a slight correction to the capital value, Dubai is one of the best places on earth to be a landlord. Healthy yields(relative to cost of capital) combined with landlord friendly laws where the tenant pays you a year in advance and the worst thing he can do to you is renew after a year with a small increase. In my country, tenants have rights:mad: this means it may take me up to 6 months to evict him if he decide not to pay his rent.....what about my rights???? My point here is that risk in property investment is about more than just capital values.

    If you have bought with the hope of selling in the short term for a profit, well, thats called speculation and should come with a big risk warning!

    Anyway.......just my take on the market.

    regards

    Kenny
     
  15. sasherwani2

    sasherwani2 New Member




    I disagree.

    Dubai is different from the rest of the markets only in the sense that the amount of corruption by the big names far exceeds I've witnessed in any other part of the world. Everyone from speculators to large real estate govt owned corporations have engaged themselves in the highest levels of corruption by manipulating, overstating and lying about the status, quality, completion date, availibility and costing of properties. Incase you havent noticed, Jumeirah Lakes Towers has NO LAKES..and as far i know, the only portion that will actually be surrounded by lakes in the Almas tower. Have you every tried to buy plots directly from Nakheel? For every transaction, the high officials as for a 10% bribe to guarantee trx. I do not have the time to write an entire report on why I predict the prices to go down by 30-60% by next year, but thats my firm belief and I have infinite reasons to believe so - weak and corrupt market fundamentals being some of them. These guys thought they were Gods and nothing can stop them from their constant misbehavior and selfishness. Just wait and see when Emaar and Nakheels first Quarter results arrive for 2009 and thats when the real "crash" will begin. Nakheel's was selling extremely substandard one bedroom apts for one million dirhams ( next to the sewerage plant? ) and people were actually buying.. Its a shame and ppl here shall realize it only when it comes up and bites em hard..
     
    Last edited: Nov 5, 2008
  16. iced

    iced New Member

    Yes, property in dubai is expensive. For example the cheapest studios cost around 500k AED. That is very expensive. However the yields are very high as the govt is trying to kick people out of villas (non sharing) and rebuilding satwa.

    I have agree with the fact that the current situation is unsustainable. Wages on average are not that great for the majority of workers and there is high inflation.

    So prices will fall generally with off plan falling the most. History says so and it shows that rents collapsed in parts of the Emirates in the late 90's.

    Prices will fall over the next year and the magnitude will vary depending on property. I expect falls of 30% but this should be bearable for the majority of investors as if this occurs then it takes prices back to what they were at around the start of the year.
     
  17. kennyhubbard

    kennyhubbard New Member

    Hi guys,

    Sasha, corruption happens all over the world. I do not see how it is any worse here in Dubai. Did you read about Enron....how about the South African arms deal(for which our soon to be president is up on corruption charges)

    I have no interest in buying a plot from Nakheel, I thought I had made my point about property investment being about achieving long term sustainable income??

    Nonetheless, I take your point about Dubai. Doing a deal in Dubai can be a tricky business.....there are stumbling blocks all over the place and there will be many people with burnt fingers mainly because of lack of due diligence. My personal gripe is how impossible it is to get a mortgage in place within the timeframe stipulated in a MOU. I recently did a mortgage through Mashreq and it took them 6 weeks(with a pre-approval) to make a payment direct to developer!!! However, for now, lets focus on the fundamentals of the market........

    I have no doubt that you have faith in your opinion, however, it remains somewhat unsubstantiated to this point(when you say you don't have time to set out your facts, well lets just say I recognise bull when I see it).

    iced, please can you tell me what measure you use to determine that property is expensive. At the risk of coming across as obtuse......are you perhaps using your income as a yardstick? Come on guys, this is property 101......you said it yourself, the yields are high. The fact is, I have several criteria to assess a property but first and foremost is "what is the net rental yield compared to the cost of capital in the country in which the property is located"? If the net yield is less than the cost of capital, then property is expensive and if it is more that the cost of capital then it is cheap......simple. If you are talking about value for money, that only applies to a property that you will use for personal use and that is not under discussion here.

    The next thing to consider is RISK.......I have already mentioned what a landlord friendly country the UAE, so my risk then lies in reducing yields. Have you guys got ANY info that suggests that rental yields are going to come down in the future???

    In terms of capital risk, well, iced, you said it, even a 30% drop will take the prices to Jan 2008 levels. That is hardly a crash.....a crash is when you wipe out 10 years of value.

    As the market delivers more properties, I believe it will move towards a yield based pricing system. This means that yields will target a level just below the ruling mortgage interest rate. In the past there has been a decided lack of completed properties to choose from and this is why speculation has been rife. There is no useful way of measuring the value of an off-plan property other than sentiment or emotion. With yield based pricing, people will be forced to consider the price they pay for a property based on how much rent they can get.

    This theory is based on the simple fact that people will always seek to optimise their living conditions. If they find it is cheaper to buy(think mortgage costs) than to rent, then they will buy and vice versa.

    Bottom lines guys, is tell me where the rental market is headed and I will give you a good idea of where the overall market is headed.

    Regards

    Kenny
     
    Last edited: Nov 6, 2008
  18. sasherwani2

    sasherwani2 New Member



    I dont care if anyone considers my views as "bull". I felt like warning you guys and I did. I dont get paid for it. If I did, I would try to write more to justify my beliefs.

    As far as yardsticks of measuring property values go, I think "location, sewage smell, construction quality, road infrastructure, pipeline leakages, contract delivery, property completion dates and "rats" " play an obviously big role (I think most ppl wouldve guessed which property I am refering to).

    As far as Enron is concerned, you answered your question yourself. Dubai is just like Enron and most of these big developers are nothing more than Kenneth Lay or Steve Wagman. Dubai market will collapse just like Enron and these big developers will die just like Kenneth Lay did.

    Adios!
     
  19. hakam

    hakam New Member

    I totally agree with you

    Hi dude i totally agree with you , Dubai will never collapse and even now if there is any decline in the prices or something that wouldn't be for so long and I think that crisis will not take more than 6 month or one year max. and then everything will be back to normal so we have to wait.......
     
  20. kennyhubbard

    kennyhubbard New Member

    Sasher,

    Actually, if you bother to read what I had wrote, you will see that to a very limited extent, I support some of your views. We just disagree on the extent.

    Furthermore, I never said your view was bull.....I said your "not having time to write a report" was bull......and I stand by that statment. And the bit about "not getting paid to justify your beliefs":rolleyes: I find that the internet is an awesome resource when I take the time to justify my beliefs, I get rewarded with further info....either in the form of info that empirically refutes my opinion and thereby causes me to stop and re-evaluate my position, or I get supporting info. In short by giving, you shall receive. Your posts are filled with emotion and no substance, so frankly you are coming across as someone with an axe to grind and looking for somewhere to vent your frustration.

    I see much opportunity coming up in the next few months for people that are able to raise the funds........:D

    Regards

    Kenny
     
    Last edited: Nov 6, 2008
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