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Finding the floor

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

  1. monsi

    monsi New Member

  2. Arno Salzl

    Arno Salzl New Member

    I like the last sentence. :) But let's be realistic:

    1. The floor for completed or near completion units will not drop to 30% from peak, or even worse, from OP, because there are still enough investors ready to buy to rent for a 10% yield! The rental market will not crash, too many people are ready to upgrade or to move from Sharjah and Ajman to Dubai if affordable.

    2. For projects by sub developpers, just or not yet started and in the middle of the desert, people pay typically 10 to 20% each 3 to 6 months. But since credit is no longer available, people stop paying. Even if you have the cash, you also stop paying because you don't trust the sub deveoppers and/or you fellow investors. As a result, the developpers will halt building. The floor here is not 30% from peak, it's less than that!
     
  3. monsi

    monsi New Member

    I don't disagree, but to be fair the journalist was saying that the 30% from peak, depends on where the peak is set and that it could be a lot lower.

    Although, he didn't touch on your point 2.

    As people become more and more risk averse the price of property that can be seen and touched is going to be pushed up. For example, Barclays are only lending on completed properties at the moment.

    I don't think the rental market will flag because people are buying rather than renting, that would only happen if there is an over-supply of rentals.
     
  4. Djjunior

    Djjunior New Member

    rental market

    Rental Market will not crash but slowdown dramatically and will align itself with global standards thus bringing down the yield or bringing down the price of the property depending on which way you look at it.

    In my opinion from a global perspective the days of people and companies paying $2500-$5000 a month are over, and on average a family of bachelor would not want to rent for more than 800-1200 a month, a more affordable and practical figure when you look at the global recession.

    This is whats happening in the States, in Canada, and what will happen in Dubai, Africa, Asia etc.. in my opinion..

    With companies cutting back majorly, and a "thrift" mentality spreading through, I highly doubt anyone will pay the exuberant rent prices which tenants have been demanding. Also with a glut of properties, those who will not be able to sell, will try to rent, and you will see competition in this area also.

    The vacancy rate may be low, but rent prices will drop to fill up all the empty apartments coming online.
     
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