Prices are already going down now with the strength of the dollar, downturn of the petrol, and shortage of fresh liquidities expect big autumn surprises as much as - 30% in some areas( for example JVS the prices will go back to 700dhs persqft)With due diligence prices will fall. More bad press regarding bribery and Tamweel. When off plan prices exceed ready property prices you know a fall is coming when people take second and do the maths and risk management calculations.
It will probably be a couple of years when we see the full effects of downward price movements
People are getting cautious no doubt. If investors have that " don't worry, come cityscape everything will be ok" feeling shows that the market is still speculator driven.Where as i surely hope Dubai cityscape brings the market full swing into action, I feel this year with a lot of negative press in the media (Morgan Stanley's report, Lack of transparency reports, senior executives being investigated etc...) people are going to be much more cautious with their purchases. I feel the hype is just being built up in regards to past trends...
Most people i speak to are concerned with the whole "don't worry, once Dubai Cityscape comes, everything will boom again" mentality!
Let's use Abu Dhabi cityscape as an example... Investors showed immense demand which caused developers to raise prices in an unjustifiable manner, yet people still bought whatever they could... After the show, people found they couldn't sell their properties as they had anticipated...
I think its a big question mark as to what will happen... If more bad press comes into the media, you'll find investors using much more diligence rather than the past where things resembled more of a fish market!
Excellent post. Everything what we should know summed up in a few paragraphs.I think all this talk is purely driven because people are used to buying in the morning and selling in the evening at crazy premiums. So if you guys are saying that these days are over - then yes i agree. But does this mean that the property market is saturated and is going to start dropping.....i am not sure about that at all. All one has to do is to visit a brokers office and see the number of calls they are getting from buyers - cash buyers, financed buyers, investors, end users....all sorts of people. Remember that more than 80% of the UAEs population is still renting and paying as much rent as they would pay EMIs on purchased properties - these people are slowly realizing this and moving into the buying phase....therefore any broker will tell you that there has been a tremendous increase in the number of end users recently.
Dubai is a city under construction - there is so much more to come and i think we are just seeing now the tip of the iceberg. When the entire thing surfaces this place will be something else. When they announced the palm - everyone said it will never happen and today we drive up and down the island without thinking about the fact that they have delivered a real wonder of the world. When they announced the Burj Dubai, everybody gossiped whether they can truly build the worlds tallest.....i remember 2 years ago when Burj apartments were selling at cost or below cost by panicking owners who thought the entire downtown project was a disastor....i would like to see the look on their faces now when the Burj stands officially as the tallest structure in the world.
The thing about investing is patience, information and courage. The golden rule - buy when everyone is selling and sell when everyone is buying is not for the weak hearted. Is there is a risk today - yes - but then the risk/reward relationship has always been directly propotional.
So invest wisely - expect a realistic return on a realistic amount of time and you will see that this city will give you a more than average rate of return. However if you want to make 400% in a month, open your eyes and wake up for that dream is over.
