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Dubai Property Market To Crash in 2010

Discussion in 'Dubai property' started by investor007, Dec 13, 2008.

  1. investor007

    investor007 New Member

    Dubai is now just a land of tall towers and inflated prices for mostly all goods and services! I have no doubt that in next year or so when the time comes for handover of the properties - the only people who may have made money is developers and very first time buyers (not the resales). Resales in Dubai is a joke! I am trying to compare Dubai's overall economic lifeline to say UK.
    I am sure many people in this forum will disagree - let's see!:rolleyes:
  2. Sportsman

    Sportsman New Member

    Old story, it's been played out before and it'll happen again. Market is re-adjusting and the strong will survive. Try Hong Kong 97 and 03, it will bounce back at some point but the entire world is being affected in this situation, which makes it unique. It's a world wide flushing of excess and too much greed....those that panic almost always lose.
  3. Zubair

    Zubair New Member

    We have to view Dubai in regional context. If the authorities issue a clear long term policy on permanent residency on apartment ownership, loads of people from India, Pakistan and China will arrive to outstrip the avaiolable supply. The market is adjusting for off plan properties and entering into a mature phase, ready to move in properties, shedding the extra weight in this process.
  4. laguna33p

    laguna33p Member

    Just your opinion from millions, means nothing.
  5. sasherwani2

    sasherwani2 New Member

    Will be much sooner than 2010. Prices are falling on a daily basis. Imagine what will happen in moNths!
  6. Darius

    Darius New Member

    I agree to you, but this is only one possibility. There are maybe few more. Until they won't choose some direction, fall of prices will continue forever.... Who knows situation, says that some buildings won't stand for a long. Imagine world market's reaction in today's context if some high-rise will collapse....

    Dubai government must do 3 steps:
    1. "Say the truth" or say "enough true". Already done.
    2. Fix or stop the fall. Already done by Abu-Dhabi.
    3. Show new ways for recovery. Still nothing. Let's wait for some time :)
    Last edited: Dec 19, 2009
  7. Sixgun

    Sixgun New Member

    Trouble is, crazy as it seems economically, Dubai does not seem to want 'foreigners' on a permanent basis.
    They have shown very little respect for the rights of foreigners in their country, including the labour market, and reversal of resident visa policies (particularly the over 60's, a massive potential market of retiree's)
    nobody even feels confident if their payments into escrow accounts are safe, too many variables and unknowns alround.
    I remember the excitement with which the forming of RERA was welcomed. that excitement didn't last long, what a washout.

    I personally would not get involved again, because I would not be confident that any laws they pass today would remain the same for future years.
    They cannot treat investors in the way they have and then expect current or future investors to have any confidence in their futures.
    i.e. the damage has been done.
    Last edited: Dec 19, 2009
  8. financier888

    financier888 New Member

    Income Tax?

    I totally agree with you Sixgun. All indications, actions and reversals clearly point in the same direction - 'they don't want 'foreigners' on a long term basis - the absence of which, the city will never grow nor attract enough critical mass to attract investors OR residents to create a sustainable economy.

    Like yourself, I was optimistic about RERA and the various laws enacted to 'protect' investors and create greater transparency. It was good in theory, but recent events over the last year suggest - it was only that - a 'theory' as they fell painfully flat in enforcing the very laws they created. The net effect of which, has left enumerable investors 'burnt crisp' to the tune of countless BILLIONS - leaving them in the real practical sense - with NO recourse.

    The prevailing attitude amongst local officials I am sorry to say, is a hairs breath away from complete and total 'contempt' of foreigners. Clearly observable from the time you clear customs to virtually every dept you need to interact with govt' or govt linked orgs.

    When reading about the cost to go to arbitration - it's simply insane and appears nothing more than a veiled attempt to 'squeeze' more money from foreigners - it seems designed to discourage and dissuade you from throwing more good money after bad rather than be an effective tool to help and assist. This is very, very sad indeed, as I was once very optimistic about Dubai and felt they were moving in the right direction but when they were faced with diversity - they fell painfully short. They were masters at 'Talking the Talk but NOT Walking the Walk' Not only on the retail level from an investors perspective but as we have now seen - on an institutional level. May no mistake about it - they way the current Bond Issue was handled, Dubai will find it very, very hard to find any institutional funding and support - in spite of whatever platitudes or positive spin you may see in the media. Institutions will avoid Dubai with a barge pole.

    TO those who proclaim, 'All the serious long term investors will be coming back this year' - wishful thinking at best or current portfolio managers stuck with inventory trying to attract the naive so they can dump and run.

    I truly respect and admire Sheik Mo's vision and what he tried to accomplish but unfortunately he placed cronies to execute his plan that are otherwise clueless and short term in their thinking and simply have little respect or concern for 'Foreigners.' Considering the order of magnitude of the people that got ripped off - covering the globe - don't expect for one minute that this will quickly fade away from the collective memory. Too many people have lost their ENTIRE life's savings...

    Considering the fact that more bonds will be coming due - with little of any sizable amounts of investments coming in and AD has it limits and also does not wish to throw away good money after bad - where will the money come from? Don't be surprised when you see the IMF step-in AND - INCOME TAX - PERSONAL & CORPORATE - think that will attract more investors? When all of your income becomes officially reported? I am sure the people from Iran, India, Pakistan, Russia, South Africa, China etc... will love that..

    In regard to the previous statement on this thread comparing Dubai to HK - It would take more than a litre of Jack Daniels to begin to see a similarity - as it does not exist. in Hk - you have a real rule of law - you have PR and can comfortably and securely live there for years. You have massive amounts of people from China that want to move there - and in fact, they had to tighten-up the visa restrictions less HK get flooded - in addition, it's still a desirable place for foreigners that are welcomed - not bitterly detested. I ask you, 'Where are all the people that want to storm the borders and establish a life in Dubai? ' If they existed, you housing surplus would vanish in a heartbeat.

    When I was living there - I spoke to many foreign nationals and they all had the same story, 'I was born here but I cannot call Dubai my home because at anytime I can be forced to leave. ' You lose your job - you're gone - it's that simple. I met retirees that lived and worked their for over 30 years - raised their families there and when it came to retirement - they had to be expatriated. Not their choice as they had the means to continue living there but by law - had to leave. How can you really build a city or a society that in effect , operates like a 'transient hotel' ?
    Dubai clearly wants foreigners to invest but does not want them as long term residents - plain and simple.

    They had a real chance and the support of many who shared the vision but alas, it was only that - a 'vision' and sadly, an unfulfilled one'. A vision evaporating like a smoke ring from a shisha pipe - a 'pipe dream' Sheik Mo's needs to replace his cabinet and bring in fresh ideas and a different mind set - especially within the legal structures and RERA to regain his credibility - but that too may be - too little too late - as has been pointed out - the damage has been done.

    My heart goes out to those stuck with property investments there and of course, they need to try to remain as optimistic as they can, but there also comes a time when you need to face the bitter facts and plan accordingly - or continue searching the bazaars for and oil lamp and keep rubbing waiting for your geneii.

    I wish you the best of luck.
  9. Wannaberich

    Wannaberich New Member

    In fact price rises have occurred in certain areas like Arabian Ranches and the Marina.
    Personally I dont think prices will fall any more.
  10. georgihh

    georgihh New Member

    We reach the point where the people will keep the property empty, but they will not sell.
    Prices will stay like this (+\- 10%) for the next couple of years.
    Me personally I will use my flat as a holiday destination.
    The government is completely bankrupt and I don’t see where fresh money is going to come from.
    If they don’t change the law nothing will happen, only the amount of empty buildings will increase.
    Dubai is disaster at the moment – no business, no activities, no life
    But I still have the feeling, that this city needs a single spark and things might turn around
  11. Wannaberich

    Wannaberich New Member

    From Abu Dhabi.
    Watch the news my friend.
  12. georgihh

    georgihh New Member

    Dubai needs 80b$ not 10b$. The 10B$ are only to cover the interest charges and pay the contractors for the last couple of months. This is only patching - not enough. As I said fundamental changes are required, unless the property law and the visa issues are not favorable to the investors there is no way out.
  13. Wannaberich

    Wannaberich New Member

    Whatever they need the money will be there
    Dubai may receive more financial aid in 2010 - Politics & Economics -
  14. Brendan R

    Brendan R New Member

    I suggest to any of you who can to try to benefit from Abu Dhabi's generosity.

    If you owned Nakheel bonds at 50 cents to the dollar, that was a good trade.

    Abu Dhabi seems to be the next sucker on the block. Pass them the hot potato.

    Sell everything you can to them.

    Unfortunately, that may be difficult as the bailout is engineered to benefit the locals and not the foreigners. Anyway, just try to exploit their generosity as much as you can as we don't know how long it will last. FYI, Abu Dhabi is trying to renege on its obligations on Citibank... Their word cannot be trusted.
  15. Sixgun

    Sixgun New Member

    "Unfortunately, that may be difficult as the bailout is engineered to benefit the locals and not the foreigners"

    As is every single other aspect of life, in the long run.

    This whole dream and vision was engineered with one thing in mind, to further the prosperity of Dubai and it's people, while showing off Dubai as a glittering jewel of future tourism and technology.

    Nothing wrong with that, unless you're one of the pawns caught up in the game with absolutely no respect or rights (yes, the foreigner on their shores)
  16. Wannaberich

    Wannaberich New Member

    If Dubai really intends to turn itself into a fantastic city and business/financial hub then eventually they will have to make foreigners more welcome.I think they will.
  17. Sixgun

    Sixgun New Member

    Well, that's a revelating piece of info.

    Dobuy, you have always supported Dubai thru thick and thin, respect,..
    However, with your recent responses, I'm starting to wonder if you're a state controlled robot??

    can you confirm/deny??
  18. Realistic_Analyst

    Realistic_Analyst New Member

    i totally disagree with you. what you are saying or imagining as like a man sitting alone in a desert! can’t you see the life in Dubai? People? Malls? Activities and festivals and all those huge projects? what about the huge projects on jabel ali zone which will be done by 2015 with are worth more than 50 usa billions? those projects just aint buildings? those projects are for large international computer companies and chemical production companies. what you are saying is false and nowhere close to reality. if you see Dubai as dead and empty buildings then i guess you are seeing what is around you only and i personally no idea where do u live exactly. as a fact prices started to increase for ready move in properties such as al badrah and business bay which will be done soon and handed over. finally if you do not like the city of Dubai you are always welcomed to leave it. no one is grabbing u from ur arms and asking you to stay here.
  19. Brendan R

    Brendan R New Member

    I guess the mantra "build it and they will come" is now irrelevant for Dubai.

    Dubai is facing massive over-construction and it's going to take a while before the mess is sorted out.

    The new mantra should be "swallow it and digest it, get leaner and start again with less leverage, better and fairer legislation, and give better treatment to foreign investors."

    Only when confidence is rebuilt will peolpe reconsider Dubai. In the meantime, there are many places ranking much better in terms of risk/return for your investments than the Emirates... unless of course your are a masochist.

    Good luck and merry Xmas.
  20. ilya

    ilya New Member

    I still believe the government does not really accept the issue.

    If you drive though the Emirates road there are signboards like "they said it was impossible to build a garden in the desert. so what?" so what... it is still a desert and a the city is now one of the ugliest places if you go farther from a mall.

    it would be a shame if it stays the same for the next 10 years as opposed to how it has changed during the last 10.

    personally, i think the collapse is still coming with the global economy worsening unless they rethink offices rent prices, housing costs and 'the foreigners issue'.
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