Dubai rents increase?

[sasherwani2]

Sash, you sadly spew all these negative preditions and say you told people to get out, predicting a correction....did you not get burned from some fly by night operation in Ajman? Did you take your own advice??

You're rental predictions are meaningless, you might be right, but very likely you'll be wrong....the rental market will soften, but there are far better opportunities in the UAE then most other first world countries currently. Rents are strong with people still moving to Dubai and Abu Dhabi, they will likely drop to a more reasonable level, but not likely to crash and you've predicted....you are obvioulsy angered by losing money and we all are concerned about the state of the market, but constantly spreading doom and gloom helps knowone.

Made a mistake with Ajman but thankfully didnt put all my eggs in this risky basket. I think Im still better off than most of the speculators. I kept most of my bigger investments away from the UAE property market. It was my gambling side that wanted to invest in UAE. In gambling, you lose sometimes and you win sometimes. I lost with Dubai. I knew the crash was bound to happen. It just happened "slightly" (about 6 months) sooner than I expected. No regrets though I learned something from it.

As far as the rental market is concerned, sorry.. your wrong. I would love to which firm in UAE isnt considering/applied a hiring freeze currently. Which sector in Dubai is actually hiring right now (except for property-legal and substandard auditing firms)??

We were on a waiting list for 2 yrs to get our storage warehouse in Jebel A
li. Now its Jebel Ali which is begging us to move to their warehouse. They are even negotiating the price with us. Plot prices have gone down "MORE" than 75%.
Check waterfront plots prices for a G+50 now and try to get hold of a newspaper from 6 weeks ago. Compare? Get shocked!

I welcome all accusitions but I suggest to keep the prices I predicted with you somewhere in your shoe storage or under your bed. Compare in Nov 2009. Get shocked!

 

[albog]

You guys didnt agree with me (and some even used inappropriate language "DoBuy!") when I predicted the property slide. Now again you guys disagree on the rental market crash. I guess either you guys dont live in Dubai OR are in denial OR are property brokers and dont want the investors to panic. People are getting fired left right and center in Dubai. Even government organizations are firing people. It has been just 39 days since the crash began. We have seen NOTHING yet..For the rental market to stay stable, there HAS to be ENOUGH tenants...
This is my prediction for the following areas as far as rentals are concerned...laugh at me now but compare this list to the rental market next year (November 2009)....

Discovery Gardens 1 bedroom AED 50-55k
International City 1 bedroom AED 35k-40k
JLT 1 bedroom AED 50-55k
Marina 1 bedroom AED 55k-60k
Greens 1 bedroom AED 50K-55K
JBR 1 bedroom AED 60K-65K
Palm Jumeirah AED 60k-65k
Oldtown AED 60K-65K
Sharjah 1 bedroom AED 25K-35K

Yaaay, they might come back to realistic prices that people can actually afford.
Anyway I think there will be more of a spread than what you describe there. A dubai marina apartment worth the same as a DG one (which is pretty much a giant parking lot)? Apartments in good locations will be worth a good bit more than ones in not so good places I think.

Other predictions:

Salik prices will fall from AED 4 to maybe 2.

Dubai Metro will not start operating in 2009

Burj Dubai will not be complete in 2009

Waterfront will be skimmed down to 1/20th of the original plan

Palm Deira - cancelled

City of Arabia - cancelled

Dubailand - delayed bigtime and skimmed down bigger time

Nakheel Tower - I'm still unsure about it but will be able to make a prediction in the next 1 month.

Ajman - 90% of the announced projects will never see a floor above ground.

Atlantis and Burj Dubai wont see occupancy levels more than 50%

Burj Dubai and the metro won't be ready in 2009 but when is anything ready on time? They will be ready in 2010, first half.

 

[sasherwani2]

Yaaay, they might come back to realistic prices that people can actually afford.
Anyway I think there will be more of a spread than what you describe there. A dubai marina apartment worth the same as a DG one (which is pretty much a giant parking lot)? Apartments in good locations will be worth a good bit more than ones in not so good places I think.




Burj Dubai and the metro won't be ready in 2009 but when is anything ready on time? They will be ready in 2010, first half.

As for the metro, Dubai government has been bragging for a while that it will be on time, but it wont be. As for Burj Dubai, it has already been delayed 1 yr. It will be delayed further by atleast one more yr.
As for the rental prices, I agree with you that there should be a gap between DG and Marina prices but there wont be. Even now a marina one bedroom is for around 130 and a one bedroom in DG is around 110. Is that really a gap??

 

[financier888]

Rent & Price corrections

Made a mistake with Ajman but thankfully didnt put all my eggs in this risky basket. I think Im still better off than most of the speculators. I kept most of my bigger investments away from the UAE property market. It was my gambling side that wanted to invest in UAE. In gambling, you lose sometimes and you win sometimes. I lost with Dubai. I knew the crash was bound to happen. It just happened "slightly" (about 6 months) sooner than I expected. No regrets though I learned something from it.

As far as the rental market is concerned, sorry.. your wrong. I would love to which firm in UAE isnt considering/applied a hiring freeze currently. Which sector in Dubai is actually hiring right now (except for property-legal and substandard auditing firms)??

We were on a waiting list for 2 yrs to get our storage warehouse in Jebel A
li. Now its Jebel Ali which is begging us to move to their warehouse. They are even negotiating the price with us. Plot prices have gone down "MORE" than 75%.
Check waterfront plots prices for a G+50 now and try to get hold of a newspaper from 6 weeks ago. Compare? Get shocked!

I welcome all accusitions but I suggest to keep the prices I predicted with you somewhere in your shoe storage or under your bed. Compare in Nov 2009. Get shocked!

I think that Sash outlines what may be the worst case scernerio but as the global financial crisis deepens, we really don't know how far the bottom will go and probably wont know till about May / June.

Insofar as the job losses go - they are happening in most sectors - most notably - now in the hospitality sector that is seeing a 50% drop in occupancy. It's also starting in the retail section as footfalls in the malls - like Burjman are way off. (MOE, Festival City and Deira City Centre still have the footfall but the sales are off) With 50% of the Dubai economy built on tourism / retail, it is only natural with these kinds of volume drops - the staffing are the first to be cut as well as reduced inventory levels which affect the trading companies.

The article posted by Sash = which includes input from several reliable brokers - whom are active in the business, clearly reflects the current market conditions and direction. It's not 'negative' per se - just the way it is.. Think about if for a second, even if the rent in a prime area and 1 bedroom flats drops t AED 85k - that' still US $2,000 per month!! - you can live in New York City for that!! It's still quite pricey and the firms that are hiring - are paying less! (one large firm here cut a few dozen jobs in customer service - they were paying 10,000 - 15,000 per person. Some positions are being replaced with new staff at 3,000 - 5,000 One of the gals that got cut called me about a job)

The Burj area / Old Town is more like Ghost Town with only about 25% of the flats being occupied. Rents are already dropping 30% with more to come as the other several thousand flats get handed over in the coming months. Many of these buyers are holding mortgages and not being able to sell - will have to rent and take any rent they can get to cut their negative cash flow. So, a 30-40% rent correction is realistic - it's a correction from an overinflated price to begin with. In the coming year you'll start to see real value for your hard earned money and this is most welcome if people are going to move here and work for more than just paying the rent... (Recently the Philippine labor agency announed that the number of Phil workers was reduced by 150,000 - why? - they left becuase they were working to pay the rent and were unable to save any money!)

I think anyone living here for any length of time will agree that the rents got out of control - way over the top. As sale prices get rolled back to the op pricing of 2006 - this will create a healthy sustainable market going forward....

If you want to talk real 'doom and gloom' - take a hard look at Ajman. Wait till the truth about what is really happening up there see's the light of day.

 

[Sportsman]

I would agree with that.....rents did get completely out of control, so a 30% adjustment is not unreasonable. I would think 90-100k for a nice 1 bed would be more realistic. Villas should still be in demand as they are very few coming on to the market, however, 350k seems high for a larger 4-5 bed. I would think back to 250k ish...

Ajman is a big mystery, I have no idea about how things would be progressing out there, it was really an extension of the booming party and it came very late...

As in most mature markets, there will be a flight to quality and those units should and will command a premium. I just hope things reach a base and stability returns to the market....

 

[DelboyG]

A couple of good articles in the national today...

http://thenational.ae/apps/pbcs.dll/article?AID=/20081221/NATIONAL/481165117/1041

Property bargains fail to sell - The National Newspaper
Take note of the last paragraph in this one...

 

[sasherwani2]

Discovery Gardens 1 bedroom AED 50-55k
International City 1 bedroom AED 35k-40k
JLT 1 bedroom AED 50-55k
Marina 1 bedroom AED 55k-60k
Greens 1 bedroom AED 50K-55K
JBR 1 bedroom AED 60K-65K
Palm Jumeirah AED 60k-65k
Oldtown AED 60K-65K
Sharjah 1 bedroom AED 25K-35K

The rents I have predicted are NOT the worst case scenarios. I consider them as the "BASE" case or the most realistic scenarios unless things get worse than I expect they would. For those who consider an AED 55k rental prediction for an apartment in a middle-income household area like DG "pessimistic", its time they start doing some research on rentals across the globe. Dubai , after all, is a part of this world isn't it?

1 bedroom in Jeddah or Dammam, Saudi Arabia (fully furnished) - AED 22k annually
1 bedroom in Houston, TX, USA (unfurnished) - AED 29k annually
1 bedroom in San Diego CA, USA (unfurnished) - AED 39k annually
1 bedroom in Juhu Mumbai, India (unfurnished) - AED 26k annually
1 bedroom (in a villa) in DHA Lahore, Pakistan (semi-furnished) - AED 15k annually
1 bedroom Nicosia, Cyprus close to Lidra Street (unfurnished) - AED 30k annually
1 bedroom Bukit Panjang, Singapore (unfurnished) - AED 50k annually
1 bedroom Manhattan, NY (furnished) - AED 78k annually
1 bedroom Alexandria , Eqypt (furnished) - AED 36k annually

* above rentals might differ slightly from the most current market prices but will give you an idea of what the rental market is around the world.

compare these rents to a "highly pessimistic" price (AED 55k) for a middle income household one bedroom apartment in a developing country in the times of recession (a possible depression even) , with lowering employment and with a 80%+ expatriate population most of which is on a "work visa"

 

[sasherwani2]

Discovery Gardens rents fall by 16-21%!!


1 bedroom large earlier rent: AED 110k new rent: AED 89k
Studio earlier rent: AED 70k new rent: AED 59k

Ready Possession
At Discovery Gardens – Mediterranean Sector, Near Ibn Battuta Mall.
Contact: +971 50 2939194

p.s. This is just the beginning. I am certain these rents will fall to the prices I predicted by Q4 2009 (Maybe sooner from how things are going). I would suggest all interested parties to wait however. DG should not be more than AED 55k for a one bedroom by the end of this yr.

 

[sasherwani2]

Bump!

Read this thread again. How I was mocked by the brokers on this forum and how now my "negative" predictions are actually starting to look "conservative".

I still stick to my predictions. Rents will be down 50% by November 09 (compared to November 08). These rents will fall further in 2010 by another 15-25%.

 

[Brendan R]

Bump!

Read this thread again. How I was mocked by the brokers on this forum and how now my "negative" predictions are actually starting to look "conservative".

I still stick to my predictions. Rents will be down 50% by November 09 (compared to November 08). These rents will fall further in 2010 by another 15-25%.

congrats, you were spot on and I believe your forecast is realistic.

The world is facing deflation and Dubai was over inflated. Add to this the lack of leadership from authorities and you have a receipe for disaster. How much does it cost to rent a tent in the desert?

Rent a tent, the way forward

 

[Sixgun]

I have quietly observed, with great interest, the predictions of Saherwani 2, and also the reply's aimed at him ( more like attacks, insults, onslaughts) by those who disagree with him.
I will say now, I admire him for portaying his true feelings and honesty, plus some good predictions.
I am no idle bystander, having initially invested in Damac ( Lago Vista, IMPZ) , then Profile (Stadium point, D.S.C) but having pulled out of both, money intact, and much of it because of reading posts like Saherwiani's.
So basically, I've been in, and pulled out twice (all in the last 12 months) and obviously broken even , but with a lot of stress.
I would be very interested, now, in a debate between Saherwani 2, and his opponents ,(Dobuy for e.g ) on this little single subject, which could be a micro-cosm for many posters in similar circumstances (except maybe they're still in/ out whatever)

MY own opinion now, (obviously easy with hindsight)

I should have stayed in IMPZ- because it's almost built and i believe the IMPZ will rock'n'roll with rental values ( i was due to pay 2.1m dhms for a huge lake view apt)

I got out out at the right time with Stadium point and recovered my 30% payment, ( reason:mainly due to uncertainty of build now).

Comments appreciated