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Pound Crashes/What a dilemma?

Discussion in 'Dubai property' started by Wannaberich, Oct 24, 2008.

  1. Wannaberich

    Wannaberich New Member

    How many of you out there are in the same boat as me.
    Living in UK,seeing the pound collapse(putting it mildly),and thinking,mmm,
    do I sell now in Dubai and take advantage?If I hang on another 6 months will
    the pound have surged and cost me alot of money?How long will the dollar remain this strong?What a dilemma.
     
  2. jordandvdj

    jordandvdj New Member

    no buyers

    no buyers in the secondary market unless your unit is finished or nearly ready.
     
  3. Sean@Phuket

    [email protected] New Member

    YES! What an absolute dilemma ! I like yourself am in the same boat ! I guess only the powers that be will know which way the pound is going to turn, although a certain someone says to me Monday it should pick up a little? Uhmm but it this just speculation?
     
  4. Wannaberich

    Wannaberich New Member

    I can see it picking up Monday.Today it took a huge nosedive because it was confirmed the UK is in recession.Mid-week it took another nosedive when the BOE
    boss said we are set for a long recession.By monday things will have been digested a bit more and things will be a little calmer.I'm no expert but I can see it recovering slightly.
    On the other hand in november if interest rates are reduced by 0.5 as is the speculation,than that will be further bad news for the pound.
     
  5. georgihh

    georgihh New Member

    If you can get good price sell.
    The pound might go more down but will come back.
    On the other hand if the situation in Dubai doesn’t improve very soon the market can crash.
    All of you people think that I always complain, but that’s the reality
     
  6. Lsab

    Lsab New Member

    We sold our studio in IC towards the end of the summer. Just a few days after the money was transferred to the UK, the pound started falling. I daren't look now at how much more we would have made if we'd have hung on but just a week after the transfer, we'd 'lost' several thousand pounds!
     
  7. PropGuy

    PropGuy New Member

    I hope UK doesn't cut interest rate by .5%, or $ is going higher. That is bad news. What is the development stage of your property?
     
  8. Gashead

    Gashead New Member

    It didn't.
     
  9. Wannaberich

    Wannaberich New Member

    And I hope it doesnt for a couple of years.
     
  10. Gashead

    Gashead New Member

    Well it was Dhs. 5.1 to the pound when I came to Dubai so the one piece of good news is that perhaps next year that perfect cottage in the country will be about Dhs. 1m.
     
  11. Fran

    Fran New Member

    In my opinion, in a long term the European currencies will go down, as they become very strong previously , which is not good for the trade and respectively the European economies. Hardly any European goods can be sold out of Europe, except the luxury brands.

    The $ is not going in a better direction either. Interventions by Central Banks and Governments may have only temporary effect, as the fundamentals of the US economy are not strong.

    Investment in AED is the wiser choice, bear in mind the introduction of the united Gulf currency in 2010.
    As a matter of fact, since the last week DIFX is allowing listings in AED. And since more than a year the Central Bank changed the deposit's rules in favor of the "basket of currencies".

    Russian currency may prove also a sound investment, as OPEC will cut the production, but nothing similar was disclosed yet by the other oil producers.
     
  12. Wannaberich

    Wannaberich New Member

    The pound is due for around another 2% cut in interest rates by summer next year at the earliest.The dollar is due for maybe another 0.75% max so here's one way where the pound could get weaker.
    Also,I've read the US is due to start coming out of their recession as early as May 2009.The UK is months behind.Therefore this is another reason for the pound to weaken even more against the dollar.
    Overall I'm pleased about that.However,a strong dollar makes it more expensive for the countries who are the biggest overseas investors to buy into Dubai.
    Less buyers means price corrections.
     
  13. talk

    talk New Member



    Today the pound stands at 5.66dirham.This is almost 1.7dirham less than my last payment.This is 20/25% less value now.Flippers would have thought 20%/25% premium was great investment.Now they have to beat the fact that they can't find capital,their properties are devalued and the strength of the dollar.Their heads are in the sand.

    Its now time for the Dubai Gov to step forward,allow longer payment plans,change mortgage laws,add 1 year to the construction timetable and any future developments all investors must prove enought funds to complete all payments.

    ANY OTHER IDEAS TO STOP THE ROT.
     
  14. georgihh

    georgihh New Member

    Yes but if you sell now you will get 25% more in pounds.
    This way you can make huge profit even if the prices go down a little bit
     
  15. talk

    talk New Member


    Very true.georgihh can you find me a buyer.Very few about.Who's going to buy into a market where prices have only just started to fall and will continue to fall.
    Finance is almost impossible to get in the UK.Ive watched massive investors fall so quickly,who have taken a lifetime to build up their investments.

    I really believe the Dubai Gov must start to help investors,put pressure on developers to give investors a break from payments,they already have enought of our money as years and can't deliver.Escrow accounts must be earning massive % rates for someone.
    My main point is that banks are now getting help,so now help the investors in Dubai.Without investors Dubai will never be the dream everyone wants it to be.
     
  16. Rammah

    Rammah Member

    Out of interest, Why will the BoE interest rate cut make the pound weaker?
     
  17. talk

    talk New Member


    The BoE meet at the beginning of each month.To many rate cuts can effect the rate of inflation.As inflation rises the pound will drop in value.In today's economy who know's what's happening.Up down/Up down/up/down.
     
  18. Rammah

    Rammah Member

    Thanks talk!
    I understand the relation between interest rate and inflation moving in opposite directions, but I don't understand why the higher inflation makes the pound value drop!
     
  19. PropGuy

    PropGuy New Member

    Lower interest rate means increase in the money supply for that currency, so value goes down.
    (1) People can borrow more since they have to pay less on the loan.
    (2) They earn less interest rate on savings so they that money comes out of deposits too.
    (1) & (2) means the currency beccomes cheaper as supply has increased.
     
  20. Rammah

    Rammah Member

    Clear!!!! Thanks for that.
     
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