Is the Dubai property market falling apart or finding a level?

Discussion in 'Dubai property' started by Nicholas Wallwork, Mar 19, 2009.

  1. Darius

    Darius New Member

    Latvia (in Europe) also gives some years term to live in (and authomatically in almost all EU) after buing some value property. I am not sure, but value depends on place and can be very low. It looks like desperation, but they realy do that expecting Russians who are tired getting Europien visas.... They hope to reanimate Real Estate market in this way

    Sorry, if 'm destroying somebodies theories :)
     
  2. Neera naidoo

    Neera naidoo New Member

    great stuff Sam Saf

    If we all lsoe hope then only will Dubai fall. we need to remain strong and hopeful- How much worse off is Dubai compared to the rest of the world. It is just being broadcasted as paralysed- for the benefit of the west!!!!!
     
  3. devaya

    devaya New Member

    Absolutely right, and it does not seem it would stop too soon.
    But whatever is said or written will not change Dubai's path of progress. Many have fallen for its charm and many express their desire to invest, live or work in Dubai. It is more intense despite the negative publicity, how do we explain that ?

    For every person leaving Dubai, there are two wanting to come in. The critics should wait and watch what will happen between now and mid 2011. There will
    be a repeat, everybody will start rushing into a well streamlined and regulated market. Present parameters are very favourable for the median population, save new laws that may be introduced in the future. The govt has a big part to play ...

    It would be a bigger blessing is there was a further correction, as this could ignite an unpreceedented population shift into the Emirate ...
    The Chinese think it is the right time, once they start many will follow (to ensure they do not miss the bus this time):creep:
     
    Last edited: Jan 24, 2010
  4. financier888

    financier888 New Member

    who's coming?

    Hi Devaya,

    Let's assume for the purposes of discussion that your claim ' for every person leaving Dubai, there are two 'wanting' to come in.' is accurate.

    There are two issues, (which is why these stats can be misleading)

    1) 'Wanting' to come in and work and actually being hired and getting a proper work and resident visa are two different kettles of fish. (As anyone that has worked or operated a business in Dubai will tell you.) I estimate that at least about one-third of the current labour force are working on tourist visa's...

    2) What is the profile of the person leaving and what is the profile of the person(s) wanting to 'come-in'. For one, many of the people leaving were the higher paid wage earners or business operators that can no longer make it in Dubai. This is NOT supposition - it's a fact. Insofar as the 'people wanting to migrate to Dubai' - these are largely lower median wage earners from India, Pakistan and a host of other countries that would jump at the chance to work in Dubai and earn AED 4,000 - 7,000 per month - far more than they could possibly realize in the home country. These are folks that 'IF" they get employed will have to rent or share a single room - hardly what would be considered future 'home owners' in Dubai - even if they could be be approved for a mortgage which is highly unlikely at those wage levels. (please note -as much as one-third of workers from the Philippines have returned home! - their wages were reduced, cost of living is still high and they couldn't save any money to repatriate! )

    That not withstanding, it would be doubtful that these folks would commit to making a purchase knowing full well, if they lose their job - off they go within 30 days! Most of them are inclined to save their money and eventually return home and buy a house, which they could readily afford and live securely - lower cost of living, secure property ownership, affordable schools etc.

    I do not deny that there are indeed some investors coming in to snap -up bargains but I doubt very much people from mainland China are moving here with a long term plan - especially if you understand their culture and point of view. My point being, the only way Dubai can fulfill its long term plan and vision is by enacting policies that encourage people to move and live here - long term. It is this way and only this way that a sustainable community will be created. As it exists now - Dubai is a transitory city

    But don't expect this anytime soon. The fact remains, that 50% of the population of Dubai (UAE) are from India and Pakistan - making it a virtual 'suburb' of those respective countries. Something that is otherwise an anathema to local sensitivities and culture. I appreciate and respect the enthusiasm and optimism of contributors to the forum but to date, no one has answered the operative question - 'Who' are the people that will fill-up all this housing and become part of the long term population for Dubai to meet it's projections (3 million +) and 'Where' will they come from? The master plan needs to be re-engineered.

    thank you for reading this
    respectfully,
     
  5. Darius

    Darius New Member

    2 years ago I asked same question to man who is familiar to high level insiders. He answered that nobody cares about that. Main aim is investors and their money. And no matter that all those buildings will be empty. That is even better. Imagine that every flat has normal family living in. With full everyday life in western way: 2 cars, lot activities, shoping, meetings, restaurants, etc. I'm sure Dubai's infrastructure won't bear it.

    When you have big economy and build few empty buidings, no problem. But when building for empty rises 30-40%.... Can this way of economy work forever?
     
  6. financier888

    financier888 New Member

    I would agree with you that some 'insiders' are of the opinion 'yes, we want foreigners to invest but not to live here' and see expats as 'targets' ripe for the plucking. However, I disagree with you about the infrastructure. The roads / highways are there - the metro is going forward and the tender has been awarded for nuclear power plants. (to a Korean contractor) - Why spend countless billions for infrastructure unless it was part of the larger plan to support a growing population? Especially when the oil revenue for Dubai is marginal? Look at the hospitals, schools etc. I do believe the plan was to see the city grow -which was a reasonable assumption until 2009.

    On the other hand - your point is well taken when you look at Ajman - which took the investor money and didn't deliver on the infrastructure - and quite doubtful if they ever had any intention to. The gov't cancels the projects after defaulting on delivering the infrastructure and then penalizes the investors 30%! No where else in the civilized world would you be able to get away with that !
    More amazing is how Abu Dhabi can sit back - silent - and let them get away with it!

    Dubai is a great city and has much potential but needs serious re-engineering. However, in absence of real changes in the visa rules and elimination of the red-tape - it's going to be an uphill battle. It is NOT user friendly when it comes to attracting and supporting new businesses. (In a country like Singapore- you can open a business within hours and the cost is a less than a few hundred dollars - and the red tape is gone as most services are done electronically and the gov't staff are friendly and polite)

    Dubai delegated programs to local cohorts that were simply not up to the task - such as the National Identity card - that had to keep changing the deadlines and back-pedaling.

    Clearly - the management that launched it were simply inexperienced - setting guidelines that were impossible and insult to injury - were downright hostile and indifferent to understanding the needs of the people they were tasked to facilitate. Further alienating the very people they wanted to attract to live there long term. Leaving you with the overall feeling - 'They just DO NOT CARE' - hardly the attitude necessary to build a growing, sustainable community..

    If they start now, in earnest - and bring in outside assistance, they can craft an achievable 10 year plan but this will require a 'fresh slate' - and the 1st place they need to start is with RERA - who's poor performance has cost them dearly - in more ways they can possibly imagine - severely shattering investor confidence and undermining the Sheiks best intentions to create investor protection and transparency. (I state 'outside' assistance because I get the sense that the Sheik is surrounded by senior insiders that tell him 'what he wants to hear' - rather than what he needs to hear' - no blame here - as we all byproducts of our culture and it is a monarchy. I reckon it would be rather difficult to find any staff of the Queen of England that can advise her 'Straight-up' - other than Tony Blair..)

    Insofar as changing the local mind set - that will take another generation. Real reform is needed and beyond some token gestures and media spin - as sadly, Dubai has lost much of its credibility - on a institutional level - down to the grassroots.

    Alas - these are just ideas but I suspect that the gov't is pre-occupied on finding solutions to meet their obligations (Bonds) with most of the issues we're discussing on the back burner. I wish them well and hope they will sort it out but without a change in mind-set - they'll remain treading water.

    Great city and I hope & pray it rises to the challenge but a 'clean-sweep' is called for.
     
    Last edited: Jan 25, 2010
  7. Darius

    Darius New Member

    I think everybody will agree to you. But looks like you (and others) are calling about your problems again and again not to each other, but to goverment. Looks like you hope that goverment will hear you.

    You mentioned Singapur as a good place. I can propose exelent oportunities in Central Europe. But you are still there. Could you say why? I agree that Dubai is grate place and many of you did something for that. But if this place is so unwelcoming, why to spend years and helth for shagrin?
     
  8. Cyrian

    Cyrian New Member

    Dubai has a lot in common with Singapore - and both have similar patterns of rapid economic expansion from a fairly modest base.
     
  9. Brendan R

    Brendan R New Member

    credit default swap on Dubai today trades at 460 over treasuries, well above Greece at 385.

    Fyi, Argentina and Venezuela trade around 1000+ and the US at 39.

    At 460, Dubai is therefore a junk credit
     
  10. paul66

    paul66 New Member

    This is because these so-called analysts think Dubai is a country and Abu Dhabi is another country. they dont look at it like the UAE.

    When are they ever going to learn that Abu Dhabi will pay off all Dubai's debt! Even Kuwait has offered Dubai financial help if need be!
     
  11. Brendan R

    Brendan R New Member

    in that case, I would suggest to Abu Dhabi and Kuwait to start bying up Dubai debt as it is a bargain if they plan to bail it out no matter what.

    The fact that they don't means they may not be guaranteing Dubai's debt after all...

    food for thought
     
  12. kully sanghera

    kully sanghera New Member

  13. Brendan R

    Brendan R New Member

  14. georgihh

    georgihh New Member

    Exactly. Another baloney, but the reality stays the same - 80 billion $ debts and the time is running
     
  15. georgihh

    georgihh New Member

    Dubai: CDS widen. This is a continuation of the whole Dubai World saga. The main issue: they never came out with a restructuring plan. Recall that in December, the Dubai government got $10 billion in aid from Abu Dhabi. That got the story off the front pages, but no restructuring plan has surfaced.
     
  16. reasonant

    reasonant New Member

    completely agree!
     
  17. FlipItFast

    FlipItFast Member

    Write off your losses?

    Interesting article.

    'Take what you can get', investors warned - Real Estate - ArabianBusiness.com

    Check out the readers comments, especially the one by Telco Guy:

    "Alice raises some good points but i think she ignores the basic issue here. Developers have already spent the money. The money investors (or home owners or whatever you wanna call the people who bought off plan at a late stage) is literally water under the bridge and no amount of regulation will bring it back.

    With the money gone the number of options is somehow limited.:

    -Bail out the developers providing funds to return the money paid up front. What most investors would like to see, but i find that very unlikely specially after DW's debt issues.

    -Bail out the developers providing them with funds to complete the properties. Probably the preferred choice of to-be homeowners like Alice. Again very unlikely (probably even more expensive than the first option) and would be throwing good money after bad as it would only help the glut of property in Dubai.

    -Let the issue die. Most investors are after all foreigners and using money to bail out foreign investors is not a popular option (Iceland anyone). That I think is what will happen. And I am afraid it is only fair that people who ignored the legal and regulatory framework when taking financial decisions suffer the consequences.

    I am really curious to see if someone (M&O?) can come with better ideas, but i think the issue here is very basic: Money is gone.

    Many people complained long time ago about the poor legal framework in Dubai and lack of oversight, we were told to shut up (and kindly invited to pack). Unfortunately you need to use the good times to prepare for the bad ones. The laws and regulations protecting investors should have been put in place before they handed the money. for them i think it is too late, it is still not clear which lessons (if any) has been learnt."
     
  18. CJGEORGE

    CJGEORGE New Member

    Sir/Madam
    Initially I thought the UAE real estate market was sinking, reading media news. But when I worked out, I realised, that Dubai is poised to come out of this crisis like a phoenix. Dubai is the only city, where, the head offices of major banks and corporate firms can migrate. I live in the UK, and here there is no incentive for earning, as the tax burden is going to be above 60%, as the debt burden of the UK is growing fast.

    I have three properties in UAE, and two of them were bought in 2005, and the price is still much higher that I bought, and the return is much better than putting money in bank, or investing in the UK. I have properties in the Uk, which have come down, and prospects of increasing is bleak.

    I forcast the the pace of increase of property price in Dubai will be faster than Abu Dhabi, and the rent rate also will increase within six months. This is the best time to buy UAE completed properties.

    Dr.George
     
  19. FlipItFast

    FlipItFast Member

    Way out of the debt hole

    Interesting articles on possible resolution of the Dubai debt problem and its impact on Dubai property.

    First-ever $20bn Abu Dhabi bonds to help bailout Dubai ArabianMoney.Net

    IMF goldmine keeps turning out Dubai gems

    These articles may be too heavy for some people's taste, so here is a key paragraph:

    "And as UBS analyst Saud Masud notes, Dubai Inc is also on the hook to complete a lot of projects to avoid having to pay back the people who bought units in them. Since it costs less to finish a building presumably than to refund all those purchases, Mr Saud wagers that Dubai Inc will choose completion. That will require that it come with as much as $60bn more."
     
  20. georgihh

    georgihh New Member

    Ok, keep on buying in Dubai. Sell your properties in UK and buy in Dubai.
    If you don’t buy you talk bull****, or you are one of the desperate agents.
    Dubai is over. Believe it or not – the game is over.
    Splash the cash and then you come back to this forum.
     
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