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exchange rate help

Discussion in 'Dubai property' started by amzee, Oct 28, 2008.

  1. amzee

    amzee New Member

    hello all,

    i was wondering if anyone would be able to shed some light for me - as many of you know recently the dhiram has declined against the pound (£) to 5.6...

    i was wondering what everyones thoughts are on whether this will go back up to what it used to be (i know it will never go up above 7.0 anymore) however, its looking like i am going to be paying a lot more for my apartment in marjan island

    i have a 20,30,50 payment plan and the 30% is due in Xmas....if it stay how it is then i will incur a somwhat large hit...the 50% is due in june 2010(assuming Khoie deliver on time)

    however, im wondering what other peoples views are on if the rate will go back up??

    any thoughts advice it looks like im going to have to pay a lot for my apartment

    thanking you in advance
  2. Rammah

    Rammah Member

    I doubt anyone will be able to answer this Q!
  3. talk

    talk New Member

    Very hard to know what to do at present.Some prices are starting to come down,which means the value of yours will to.UK interest rate hopefully will come down at the beginning of NOV,and perhaps a small boost for the pound then.

    Depending on how much you haved paid would it pay to break contract.Developers don't chase to many who break.But how much would you lose.If a developer can sell your unit for you prehap you could accept less with the dirham so strong.

    Does the developer off a long term payment plan over 15 years.If so will he transfer you to it.

    In 1 years time the I think the pound could be 6.3 dirham.

  4. talk

    talk New Member

    Ive also just read that it you default a developer can only hold up to 30% of all monies paid and pay back the remainer.

  5. amzee

    amzee New Member

    guys thank you so much for your help - however, i dont want to bail out on the developer as it is a fantastic development.

    my thinking is that if it is going to go up to 6.0+ then i am happy to spot buy - but the way things are its below 6.0 and that is not good at all...

    so i know nobody has a crystal ball, but anyone with a bit of financial experience of going through the same thing, i thought would be able to give some confidence that it may go back up.....

    the developer offers a 15year mortgage package which is fine and hopefully in that time the dhiram should rally back up healthily?!?
  6. MaxyzK

    MaxyzK New Member

    Exchange Rate Dilemma Where's Mystic Meg when we need her?

    When I wanted a forward fix a few weeks ago, I was being offered 6.6 - 6.7 at the time, which I declined, foolishly thinking that sterling could do better! Can you believe that! Hindsight's such a wonderful thing!
    Now with 5.6 the norm, I can only cry, or LOL!
    The US elections are only days away, and traditionally, the US economy picks up a little after such elections. Therefore, we could lose a little more, and so we need a boost, and fast!!!!
    Remember that song recently...... "you got me feeling suicidal, suicidal!"?
  7. PropGuy

    PropGuy New Member

    It is opposite. dh has appreciated against £, you used to get more dhs per £ (£1:dhs7) , now you get less (£1:dhs5.6).

    so if you are converting your money from £ to dhs than next payment plan is costing you 20 to 25% more currently. Normally corporations hedge by buying 20% to 40% of sum in currency they are dealing with.

    In your case, I would recommend you to hold if you can still pay the full payment at the current rate, rate can return to 1:7 ratio. Or get a mortgage.

    It is difficult to predict forex prices at the moment, but if there is no more bad news about the global economy then rate is likely to go back up for £.
  8. amzee

    amzee New Member

    guys thnk you so much for your advice and help - i know that there are other people in the same boat out there...

    i think that i am going to have to take the hit on my 20% installment due and then hope that by the time my next 50% is due in 2010 that the pound has strentghened back up and we are getting more dhirams to the pound....i know thatthis is really hard to predict however its good to get everyones opinion on this

    are there any competitive places ot there who are giving a better rate? i know first ratefx and hifx are doing 5.6412 at the moment.....
  9. Wannaberich

    Wannaberich New Member

    Most of what I've read suiggests the pound will get even weaker.
    UK interest rates are due to go down to maybe 2.5% which apparantly will do more bad then good.
    Also,because then US got into a recession far sooner than the rest of the world,it will come out of it far quicker.May 2009 I've read.So I guess an improving US economy can only weaken the pound even more.
  10. PropGuy

    PropGuy New Member

    interest rate is not the only reason, people think US govt. is less likely to default so they are investing in T-Bills with guaranteed return on investment. All this T-Bill and US govt bond buying has increased the value of US$ too.
  11. georgihh

    georgihh New Member

    Pound has been as low as 1$ and as high as 2$
    What goes up comes down
    The average during the years is 1.60$ or just below 6 dirhams
    Expect anything from 5 dirhams to 6.5 dirhams in the near future
    If pound goes down to 5 sell dirhams(or your property) if goes up to 6.5 invest in property
    In Dubai.
    Very simple scenario and you can make 20% from the rate exchange on top of the property margin.
  12. talk

    talk New Member

    1 pound is now 5.89drm.On way up.
  13. PropGuy

    PropGuy New Member

    I meant don't entirely depend on interest rate for forex rates, there are other imp. factors. With the fears of Global recession investors are assuming US$ as the safest investment, but US economy is in deep trouble. Whenever US$ value as safe investment erodes then there will be decline in $ value even though if UK CB rate is lower.

    I'll make another topic what is causing the rise in $ value.
    Last edited: Oct 29, 2008
  14. PropGuy

    PropGuy New Member

    £ recovered 40% of its value, but not sure for how long.
  15. talk

    talk New Member

    1 pound is now 5.99drm
  16. georgihh

    georgihh New Member

    its time to buy dirhams
    Forex is open 24 hours
  17. talk

    talk New Member

    1 pound is now 6.023.How on earth would you ever know what to do.UK interest rates should drop 0.5% next thursday.

    What do you think of the value of the pound/drm if this happens.
  18. PropGuy

    PropGuy New Member

    It is expected drop with rate cut, but if market has factored that rate cut then it won't have much impact and pound will continue to rise after slight drop. Pound will come down today or tomorrow because forex traders should start taking profit now with the spike in price.

    Usually people in this situation hedge, buy some amount in dhs now and see later what happens. If price goes down then loss is minimized. If there is no bad news about global economy then US $ should start to slide again.
  19. Wannaberich

    Wannaberich New Member

    PropGuy where do you see the dollar/pound in the next few months?
    Taking into account UK interest rates will prob come down to at least 2.5%,plus the US economy will/should recover much earlier than the UKs.
    Also,do you think after the US election next week,the dollar will be affected in a positive way?
  20. Rammah

    Rammah Member

    US just dropped their interest rate from 1.5% to 1%!!!!!

    What's going on!!!!
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