Thread Status:
Not open for further replies.

New laws will strengthen Dubai real estate industry

Discussion in 'Dubai property' started by Wannaberich, Aug 30, 2008.

  1. Wannaberich

    Wannaberich New Member

  2. firasdxb

    firasdxb New Member

    dubai prices will go down ... always markets go against what is wrote in magazines and media..
     
  3. docc

    docc New Member

    Hi Firas,

    Care to elaborate a little more?

    I was under the assumption that these new laws will be bad for flippers hence creating a better end-user model. This inturn should actually increase confidence in the market shouldn't it, considering the effect it will have on market speculators?
     
  4. Fran

    Fran New Member

    Sure it will increase confidence, but also it will significantly reduce the speculative activities and encourage end-users.

    :confused:The big question: how to find enough end-users for all the upcoming developments?
     
  5. Roshan

    Roshan New Member

    No market will go up forever. When more developments hit the market, expect a correction, this is common sense and no one can deny that.

    On the other hand all the developments in Dubai are based on speculation that people will come in. Ask yourself this question, what if they don't ??.

    Dubai might be building too much, that's the impression one gets.

    Regards

    Roshan
     
  6. firasdxb

    firasdxb New Member

    you are saying new laws will reduce the flippers... i think dubai market didnt grow up because of business intelligence ... it is all the a result of flippers and greedy people who like to watch prices go up... the boom happened in a small time frame period.

    and as the above guy mentioned ..where can you find that super end-user model ..?? who will really throw 30% in 18 months..and then only he can flip...

    i guess Dubai people are more clever than we think...they are planning behind scenes to turn property market in dubai into a long term investment market.....the golden age of doubling and trippling in a year is ending now ...
     
  7. docc

    docc New Member

    Can someone explain to me as to WHY exactly flipping would become less once these new laws are instated?

    If i purchase property whether off-plan or that which is already under construction and if i DON'T take a mortgage, what prevents me from flipping it at a 5-10% premium within 3-6 months?
     
  8. Wannaberich

    Wannaberich New Member

    Just spoke to the agent who is renting a property for me and his sponsor,a high ranking official confirmed to him that capital gains tax is def comint to Dubai very soon.Also,both buyers and sellers will have to do the transaction through RERA after registering with them.
     
  9. docc

    docc New Member

    I don't see capital gain tax coming anytime soon. Too many new laws at the same time will really deter investors creating a negative feel to the market. Dubai needs what's happening here....Need!
     
  10. talk

    talk New Member


    I read all gulf business news and I reckon CGT is coming soon.

    This may read stupit.'Flippers flip to flippers,who flip to flippers'.

    Dubais real estate problem is as above.Now am not 100% sure of the new law but it does incorparate the resale of property not held for a minimum of 1 year that CGT will be paid on gains.

    Few investors have no mortgage,so this CGT will apply to most.
    Office space investment /commerical may miss out this law.
     
  11. docc

    docc New Member

    So, investors who don't use mortgage will be spared from Capital Gains Tax?
     
  12. talk

    talk New Member


    It would be really good to see the new law issued!

    I don't believe it's CGT is important to the GOV but more trying to take the risk out of the market.The market has moved to fast in the last 2years and CGT will slow flippers from pushing to hard.

    Through experience I've found that some units I've had with no mortgage have been much harder/slower to resell.
    Most investors will take finance from some place and cash flow will eventully become a problem.

    The new law also states that only certain banks/lenders can issue finance which may effect some developments which offer"15year payment plans,everyone qualifies".


    What do you think not having a mortgage in the new law means.

    1.You must pay 1 full payment only to the developer when purchasing offplan, of the total amount of the property.

    2.Could if mean you can't pay in installments over the period of construction.
    If so maybe then you will be have to pay CGT of some %.


    Sometimes I think the GOV reads our forum the weeks before the issue of laws to get some advice.
     
  13. docc

    docc New Member

    "Through experience I've found that some units I've had with no mortgage have been much harder/slower to resell."

    I thought it would be the other way around. Since you haven't taken mortgage, i assumed that it would be easier to sell. Why was it harder for you?
     
  14. talk

    talk New Member




    To be honest I actually blame the developer and the estate agents themselves.
    They make more money out of a purchaser taking a payment plan or finance.

    In 2006 I sold 3 units with payment plans and they all sold within 2weeks.The plans had only began about 4 months and the buyers took over the payments.This gave the purchaser less money to pay out front and kept the developer happy as they stayed on the payment plan which had interest on the payments.

    Two units also which I had on payment plans but where over 1 year started took over 12 weeks to sell.There was more of an inital outlay for the new purchasers and it took longer to find an investor.
    I had emails from 1 of the purchasers an he said he would rather have started a new payment plan but the developer refused.When he said he would try to get finance elsewhere he was told that he had to take the payment plan and that "I would't wait on him or give him any time,and that I was going to remarket."

    2 units I purchased with no mortgage in 2006(I though to they would be easier to move on) I found that when I marketed them early this year the developer offered no payment plans and purchasers were harder to find as finance from larger lenders was not an option as anyone looking to buy had (gone beyon there
    cash flow limits).eg...(No long term purchaser,only flippers.)

    The market now is much slower at present.
     
  15. docc

    docc New Member

    Ahhh, i see you were referring to developer associated finance. Thanks for the explanation.

    I believe Discovery Gardens by Nakheel was one such problem area as most banks refused to finance them. I would definitely not invest in those especially if i am considering flipping it!
     
  16. Wannaberich

    Wannaberich New Member

    CGT will only apply to those about to buy an off-plan property and not to those who have already started making payments on a place.
    It looks like RERA are working hard to bring more transparency to the dubai market with this and other laws which is good.
    It would be even better if RERA werr better at dealing with disputes between buyers and developers which at the moment they are pretty poor at.
     
  17. talk

    talk New Member




    Do you not believe most problems that a developer has are GOV related.Delays,delays,delays.I believe these are caused by the GOV on purpose as the land belongs to them and some developers are GOV owned.

    RERA could do much better but are their jobs worth putting on the line by "rocking the boat".

    Have some developers rocked the boat and now seen that they should'nt mess with the wrong people.

    I've found very few developer give straight answers,why can they not be more open with problems they have occurred.


    Unless RERA becomes TOTALLY INDEPENANT and is prepared to tackle all developers,courts etc for everyone,they will become limited to what they can actually do for both developers and buyers.

    Your thoughts..
     
  18. docc

    docc New Member

    I have heard that the Govt is on purpose slowing down land delivery and certain infrastructure developments for large projects so that the demand for completed property doesn't die down as a result of over supply. This actually is a smart move so as to keep current prices sustainable in response to the ongoing demand.

    Projects in the Waterfront alone should be delayed atleast 5 years as there are MASSIVE land parcels there that have already been sold to developers waiting to start construction.
     
  19. talk

    talk New Member




    When I first researched Dubai every comment made was"By 2015 Dubai will do this,have that,achieve this".Now things are becoming more sensible with tourist programs saying "By 2025 Dubai shall have this and by 2050 shall achieve this".

    These tourist programs are just another way of telling investors,slow down and don't over heat the markets.
    How many times do you think these buildng's will be up and down by then?.
    A lot of skyscrapers will not last 40 years,and a lot build to close together how will they ever get them down.

    Perhaps Dubai will follow a circle!
     
  20. firasdxb

    firasdxb New Member

    you might be able to flip only 18 months afte rpurchasing if the the payment plan is 10% every six months..

    which is not a fast turn over business....so i advise come here to abu dhabi ...and try flipping business in launches ..and not any luanches..

    i bought a unit in BMC by Manazel a month ago with 10% premium ...and currently am paid 10% ..becuase Tamweel started doing mortgage to teh project ...so ...you know guys..chances are few ..but you need to work out finding it ...
     
Loading...
Thread Status:
Not open for further replies.

Share This Page