Predict the prices in 2010

[georgihh]

Thanks for your reply but my main question is what happen when everything is ready??? Will the OP matters then?

Prices will go up slowly but unquestionably.
At the moment the government is trying to regulate the business and they want a steady growth.
OP will disappear with the time and buy to rent number will be more accurate.
I expect the average rent per year to be 7- 8 % of the property value in the near future lets say 2010.
So one bedroom in DM if is going to be 120000 DHS per year = the property value will be1.5M
As you can see some properties are at the limit and some have long way to go.
Soon or later the above rental rule will take place.
If you buy for yourself is going to be a deferent story but will be around the above figure

 

[HaiderAli]

Prices will go up slowly but unquestionably.
At the moment the government is trying to regulate the business and they want a steady growth.
OP will disappear with the time and buy to rent number will be more accurate.
I expect the average rent per year to be 7- 8 % of the property value in the near future lets say 2010.
So one bedroom in DM if is going to be 120000 DHS per year = the property value will be1.5M
As you can see some properties are at the limit and some have long way to go.
Soon or later the above rental rule will take place.
If you buy for yourself is going to be a deferent story but will be around the above figure

Thanks for your reply. So, do you think rent value will differ that much in the same zone, say DSC.. where both properties are there, one with OP 700AED and the other with 1500AED.. ??? Basic facilities are same but just the time of launch and increase in construction cost forced the prices to go high.. What do you think about that...?

If I purchase two studios in DSC -
One in, Elite 1 - OP around 700 AED - Current price - 1000 AED
One in, Elite 7 - OP around 1300 AED - Current price - 1400 AED

Somewhat similar location and features?? What do you think what will be the predicted rental value, do you think the rental value will depend on the OP or what?

Is it possible, that both have the same rents?

 

[georgihh]

Thanks for your reply. So, do you think rent value will differ that much in the same zone, say DSC.. where both properties are there, one with OP 700AED and the other with 1500AED.. ??? Basic facilities are same but just the time of launch and increase in construction cost forced the prices to go high.. What do you think about that...?

If I purchase two studios in DSC -
One in, Elite 1 - OP around 700 AED - Current price - 1000 AED
One in, Elite 7 - OP around 1300 AED - Current price - 1400 AED

Somewhat similar location and features?? What do you think what will be the predicted rental value, do you think the rental value will depend on the OP or what?

Is it possible, that both have the same rents?

Buy the cheaper one – rent will be pretty much the same.
The same scenario happened in Springs. Different phases different prices but now the rents are the same.
And on top of that number one is going to be ready before number seven in most of the cases. And you might be able to benefit extra 10 % from rent for the first year

 

[HaiderAli]

Buy the cheaper one – rent will be pretty much the same.
The same scenario happened in Springs. Different phases different prices but now the rents are the same.
And on top of that number one is going to be ready before number seven in most of the cases. And you might be able to benefit extra 10 % from rent for the first year

Ok, thanks a lot..

Yes, that was my question because when everything is ready, who will consider the OP?? And I personally, recommend to purchase a low cost property even if the premium is relatively higher..

Anyways, I would love to hear what other people thinks about my original question about the price difference, when everything will be ready?

 

[georgihh]

Ok, thanks a lot..

Yes, that was my question because when everything is ready, who will consider the OP?? And I personally, recommend to purchase a low cost property even if the premium is relatively higher..

Anyways, I would love to hear what other people thinks about my original question about the price difference, when everything will be ready?

OP doesn’t matter matters location and luxury.
OP is a term created in Dubai and is going to disappear very soon.
When you buy bread you don’t ask about the production price but for the quality and the resale price.
Don’t worry about the OP price worry about

Time of delivery
Price and location
Terms of payment

And my advice is work it out on a rental return and not on appreciation as prices might go down and up again

 

[HaiderAli]

OP doesn’t matter matters location and luxury.
OP is a term created in Dubai and is going to disappear very soon.
When you buy bread you don’t ask about the production price but for the quality and the resale price.
Don’t worry about the OP price worry about

Time of delivery
Price and location
Terms of payment

And my advice is work it out on a rental return and not on appreciation as prices might go down and up again

Sounds very Valid..

 

[Roshan]

Just a quick question?

I was just wondering, the prices in today's market varies a lot.. One property from a same calliber of developer, launched an year ago has 1100 AED/SQFT price in DSC and the one launching today has 1500 AED/SQFT?? And the current market value also varies due to the difference in Original Price. Just wondering, what will happen when all the properties will be ready? Will this difference be maintained considering their OP or all comes down or all goes up??? Please share your thoughts. Thank you.

This is what happens when there are speculators in the market. Developers get excited whenj they see the frenzy and the greed in them raises the prices to abnormal heights. What do the developers care when there are people to buy. Andyes, the ready excuse is that the prices of building materials have gone up. No developer will be in the business, unless they make a 40 to 50% profit I guess.

Nobody knows what the actual value is. Till the speculators are in, the developers will have a field time. If you have the money, advisable to buy ready to rent properties - OR - off plan from the secondary market.

Regards

Roshan

 

[HaiderAli]

Roshan,

Thanks a lot for your reply.

Just a quick question, what do you think is the actual prices in DSC? I know, no one can tell this but what's your guess? They vary from 1000 AED to 1700 AED.. And I just wonder, who is brave enough to buy at that rate until the property is extra-ordinary... Let me know. Thank you.

 

[Roshan]

Roshan,

Thanks a lot for your reply.

Just a quick question, what do you think is the actual prices in DSC? I know, no one can tell this but what's your guess? They vary from 1000 AED to 1700 AED.. And I just wonder, who is brave enough to buy at that rate until the property is extra-ordinary... Let me know. Thank you.

Nobody knows the exact rate. Everybody is speculating. Wait for the calm to come in and then thereal prices will be known.

Roshan

 

[mpat]

My guess is 1000 AED.

 

[HaiderAli]

My guess is 1000 AED.

Are you serious??? Is this what you really think? I am not sure?? Anyone else??

 

[Roshan]

Hi Friends,

I dont know if I am right, but for predicting the capital values/sqft lets say by the time it is ready, and that too on the worst case scenario, I would say for example if we have a 3bedroom apt in Dubai Sports City e.g. 1500sqft, I think at any point in dubai rent for a three bedroom flat would not be less than 125,000, which means for any owner taking the worst scenario, if the capital value is anything more than 2.1Million it would not be feasible for him as the rental yield would be less than 6% which he easily would get in a bank, so in the worst scenario 1400/sqft would make sense, but the whole scenario changes if average rentals for a three bedroom would be 175,000, then the owner would not mind going even upto 2.85million as it would still be better than the bank's giving 6% so the acceptable price would be 1940/sqft...

So its all a matter of perception... but atleast we know that in worst case 1400/sqft could possibly be sustainable and in dooms day scenario if a three bedroom generated 100,000 then also a price point of 1110/sqft can be considered sustainable...

Please let me know your view on the same friends..

Regards,

UAEREALDEAL...

A lot would depend on if you are leveraging on the investment. Nobody would like to get into negative cash flow scenario.

My hunch is that anything below Dhs 1400 psf and with proper leveraging we can be on positive cash flow.

At Dhs 1940 psf, you are in the danger zone and most likely will be in negative cash flow.

Regards

Roshan

 

[ssazain12]

is the crash in dubai market started...?

Recent report from MODY predicts a 20% correction in 2009-2010 when the demand out pass the supplies.

they predicted a 20% correction on apartments value and 10% correction on town houses and villas.

The billion dollar question is
Is this right time to hold/buy/sell the property.?

Any comment please...

 

[sasherwani]

I have heard about a lot of such reports in the past. I dont think the economic fundamentals are that strong in the UAE to follow the demand-supply curve. Prices going down in Dubai will allow Sharjah and Ajman residents working in Dubai to move to Dubai again increasing the demand for Dubai apartments. I predict a correction not before end of 2011 or early 2012.

 

[maximusprime]

I dont think it is possible to make such a broad judgment as whether you should sell or hold property in general. In the end it will all boil down to whether the property you have is intrinsically valuable. The marina prices are getting to be right about where they should be. Discovery gardens on the other hand is probably a rip off if you bought it now. The correction will hit some areas harder than others. Even so, I dont think it will happen until one of two things happens.

1: the government takes strong measured to get rid of speculators (which would be a bad move in my opinion as it would cause a panic and stop the massive influx of capitol, as well as hurt the developers, by making it harder to sell their properties (many of which are part of the government)).

or

2: prices become so high that expats who move here to avoid paying taxes find it cheaper to move home and pay taxes again (not too far off if you ask me). I dont think over supply will be that big of an issue as there are plenty of people who are willing to hold on to their empty properties and release them slowly in order to keep values high (JBR for instance),and all the other factors like mat'l shortage etc.

 

[iced]

10% down

Morgan Stanley are predicting 10% falls within the next 18 months in dubai.

 

[Serene]

Morgan Stanley are predicting 10% falls within the next 18 months in dubai.

This is pretty close I think, it depends on whether the infrastructure ( mainly the road system ) problem is resolved. Otherwise it can have a more serious affect on the future pricing of property in general in Dubai.

 

[mdevotta]

2000 per sq ft

To guess the prices for different location in 2010 will be difficult simply bcos of the preference factor. One might prefer to live in a clam area,the other might choose a location to counter traffic worries..another proximity to work or in some cases proximity to schools for children..some close to malls,beaches etc..etc..

My guess is that price per sf feet will average around 2000 per sq ft.. and Dubai easily qualifies for this range. Look at London,Bombay,Toky0,Newyork,hongkong,Paris,Singapore,Beijing,Abudabhi...
My job involves extensive travel and I spend most time of the year in one of the above mentioned cities and dubai is only catching up to thier prices...I beleive one day,,, to own space in Dubai will be a previlage that we in this current generation are lucky to benefit from.(no matter size or location)

However how much exactly for which location is impossible to predict at this point as properties tend to enjoy spillover effect for appreciation.

 

[kaku67]

i think dubai sports city would come down to 800 per sq feet . as all projects would be delayed for like 3 years , for downtown area i dont see a logic of buying a one bedroom for 10 million and get a rent of 125000 only.

 

[Sportsman]

I disagree, I think Dubai Sports city will be one of the most liveable and exciting areas to live. Live sports, concerts, great shopping, canal walks, all in a very intimate setting. Take the ranches for example, it's just houses with no real heart. It has a small stores center for shopping but nothing to really attract people...

My belief is that Sports City will be one of the most desirable areas and building is finally starting to take shape. Prices will be hard to predict but if things settle down which it should, 1500-1800 drm/ft would be my guess.

The lands dept, can delay projects and approvals just to keep the supply in a slightly short position. I believe this soft spell is good for the market and keep people honest and speculators at bay....Dubai is still an amazing story and will continue to be.