When is it going to stop?

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georgihh

New Member
We have just entered 2009 and as far as I can see we are still going down.
1 When are we going to find some buyers and rich the bottom?
2 How long is this bottom going to last?
I (my money) would like to get out of this place but looks like we are stacked here for a very long time.
I think most of the investors are in similar situation and your plans of action for the near future will be highly appreciated.
Before was easy pack up and go, now we need to sell (but no buyers) or keep on paying the enormous charges and hope for the brighter future
 
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naxal

New Member
To add on the above ,I would like to know what all you guys think about a certain news I've just heard on the radio >>>>>>>>>>>> "In the near future ,the GCC countries will definitely introduce various forms of taxation as oil revenues are dropping steeply" .


:eek::eek::eek:
 
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wottodo

New Member
I understand how you feel and every day hope we are need the bottom. The banks cannot hold their "limited lending" stance forever as after all they are businesses who need to make profits and keep the shareholders happy.

Lets hope Obama entering the Whitehouse will get the ball rolling int he right direction.
 
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Djjunior

New Member
It will stop once the global economy recovers.

Give it one year for sure.
Another one after that is also possible, if things get really bad.

You also have to account for all the excess supply which will come on to the market (This depends on how many projects are compelted and how many are cancelled).

Relaxed Lending in one area wont solely help a property market. Especially Dubai as there are limited local buyers. Most of the buyers have foreign investments which are also hurting, so as a whole most smart businessmen will be reluctant to spend, or to invest anywhere for the next year or two.

The only people who will want to buy are those who wish to live in Dubai and not rent, or those who feel bottom is near (Very few in my opinion with the way things are going). This could also be another issue, which I wont get into.

Bottom can not be reached in a few months, if thats what people are thinking there are way to many problems out there for a bottom to be reached so soon.

There are serious problems, and this will take time to fix.
 
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renter1

New Member
Q3 2009

The rebound is closer than a lot of people think, but we have much further down to go first..

1. The banks will not start lending until Q3 2009. They don't care about customer relationships, they're just terrified right now about defaults on credit cards, personal loans, car loans, mortgages etc etc.

2. The takeover of Amlak/Tamweel by Abu Dhabi won't properly take effect until Q3 next year. Only then will the new Emirates Development Bank open the tap for future lending.

3. The authorities don't really care. Why should they? Their gleaming new city has been built, almost for free, by foreigners.

4. Further selloffs in equity markets and redemptions at hedge funds will keep the USD well bid for several more months. The same trend will keep the oil price depressed. Both are big negatives for Dubai real estate.

Until the market moves past points 1,2 and 4, there will be no rebound. However these are all temporary factors and there will be real value in Dubai real estate from Q3 onwards. Emerging markets like this can bounce back almost as quick as they fall, but there is a lot more pain to go before we reach that point.

Expect another 30-40% fall in completed property values from today's levels.
 
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Ayyan

New Member
In the interview, Dr. Al Fahim has elaborated his views on the current market situation. Excerpts:



Gulf News: We have all heard a lot about the problems with Dubai real estate following the financial situation. How is Abu Dhabi real estate doing?

Dr Sulaiman Al Fahim: Everybody has been affected but next year we have to fasten our seatbelts. But we have to use this time now as it's a good time to buy a property for the end-user, not for speculators. It will be an end-user year and that's why we are starting with Sharjah as it's for end users.

We believe that most of the end-users were on the stock market and losing their money there, next year they can make the money (back) if they put it in the right places within the real estate sector.

And we have to use the lower price of construction, we are saving Dh100 million per tower. This saving should be passed back to the end user, in terms of better payment plans.



What sort of payment plans is Hydra offering clients?

For some projects we are offering 30-70 per cent, some 50-50 per cent, 40-60 per cent. It depends on the project. We have approval for 70 per cent financing for the Hydra Village project but we are negotiating up to 90 per cent. I think 70 per cent is healthy.



How is the mortgage market in Abu Dhabi?

I mean Al Dar and Sorouh already have 80 per cent financing, as they're government companies. It takes time, in six months the market will be back, in Dubai as well. Abu Dhabi is a new market and there is no oversupply. But Dubai is a strong market and there were a huge number of announcements last year, which have now gone down.

In the next few months, all the banks will know which of the announced projects are okay and which are cancelled and the supply and demand situation will become balanced.

I don't know why these companies are firing people. I don't see the reason. If they hired at the right time, I honestly don't see the reason why they're firing them now. Just to show they're hiring? I'm hiring.



How are real estate regulations in Abu Dhabi compared with Dubai? Are there adequate laws in place to protect investors and their money?

Sometimes regulations start hurting the market. So most of the investors ran away from Dubai with the Rera regulations. They don't like to be tied up with [things like] escrow accounts.

But don't you think such regulations make everything much safer?

Not really. Because speculators made their money from pre-sales and some investors want their money in everything. They are short-term investors. It's an open market and you can't kill the market by putting regulations on everything. Either it's an open market or it's not.

It's up to them whether they lose money or make money. Having an escrow account is fine but having it [closed] is wrong. What if I need the money? What if I want to buy another property and want to sell it? You cannot close the market.

There should be a government announcement in Abu Dhabi and Dubai and the whole of UAE on how they will support the private sector - not just in real estate but everything. Stock prices are going down, property prices going down but gasoline prices is still high, food is still high.

There's no real government initiative for this. If everything is going down, prices should come down too.



How do you see the property market in Abu Dhabi and Dubai over the next 12 to 18 months?

The good thing with the UAE and Dubai and Abu Dhabi is the leaders. We have good leaders and good vision and it's too good to fail. His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is the real asset of Dubai and he has a great vision.

I honestly don't believe that there is a difference between Abu Dhabi and Dubai.

Because of the Abu Dhabi vision for 2030, everybody has stuck to the plan and there isn't over-constructing. The Abu Dhabi Government went through recession in 1981 and 1997, so they understand recession.

In thenext few months, all the banks will know which of the announced projects are okay and which are cancelled and the supply and demand situation will become balanced."
 
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georgihh

New Member
To add on the above ,I would like to know what all you guys think about a certain news I've just heard on the radio >>>>>>>>>>>> "In the near future ,the GCC countries will definitely introduce various forms of taxation as oil revenues are dropping steeply" .


:eek::eek::eek:
This is a big problem
Taxes already started in one form or another (visa, fines, company charges, services).
The people are already suffering and feeling the pain.
First the small businesses will bankrupt.
Already in IC one can buy a business property for 400DHs per sqft.
We have bought a shop in IC and set up a business (office). First the area was free zone now is no more free zone. Imagine every time they change the status of the area we should close the company and set up another one. And this cost money. Never mind the charges for the visa. I heard different area such as JLT will be restricted to a certain type of business. This will restrict the property owners of selling or letting out the properties.
And instead of easing the situation the government is tightening the belt, but for how long.
The property is the worst scenario – the prices are going down and at the same time the service charges are going up.
The government says Dubai is for the rich and for the tourist, but where those people are, looks are like they disappeared. Emirates is doing a business only from connecting flights (when one airline company starts relying on connecting flights is very bad).
No planning, no proper law, no coordination – this time I am afraid no way out.
Some people in this forum say invest for the future. Ok I agree but I say place with no history might have no future; I prefer to invest in a place with a history.
I am saying all the above just to prevent a further collapses and hope that the government will realize the significance of the matter and will act accordingly
 
F

financier888

New Member
Taxes and Timing

This is a big problem
Taxes already started in one form or another (visa, fines, company charges, services).
The people are already suffering and feeling the pain.
First the small businesses will bankrupt.
Already in IC one can buy a business property for 400DHs per sqft.
We have bought a shop in IC and set up a business (office). First the area was free zone now is no more free zone. Imagine every time they change the status of the area we should close the company and set up another one. And this cost money. Never mind the charges for the visa. I heard different area such as JLT will be restricted to a certain type of business. This will restrict the property owners of selling or letting out the properties.
And instead of easing the situation the government is tightening the belt, but for how long.
The property is the worst scenario – the prices are going down and at the same time the service charges are going up.
The government says Dubai is for the rich and for the tourist, but where those people are, looks are like they disappeared. Emirates is doing a business only from connecting flights (when one airline company starts relying on connecting flights is very bad).
No planning, no proper law, no coordination – this time I am afraid no way out.
Some people in this forum say invest for the future. Ok I agree but I say place with no history might have no future; I prefer to invest in a place with a history.
I am saying all the above just to prevent a further collapses and hope that the government will realize the significance of the matter and will act accordingly

I dont think you will see income taxes or corporate taxation anytime soon. That would kill FDI (Foriegn Direct Investment) and 'no taxes' is one of the most attractive selling points of the UAE - it would also do serious damage to investor confidence as it raise serious issues of 'public trust' in the governing body. On the other hand, if you want a first class infrastructure - the money has to come from somewhere. I dont think most people will object to a small VAT or GST - especailly if you are not paying income or corporate tax. I do think the Salik charges that were rolled out are a bit over the top... considering the average wages here... maybe this will be re-considered in light of the current economic downturn and less traffic on the roads...

Timing - good question - 'where and when is the bottom?' - If anyone could clearly and defintively know the answer to this - they should be appointed Chairman of the Federal Reserve Bank in the USA - and manage the global cash flow ! best guess? - May / June - we may hit bottom with a slow and steady rebuilding process. In the US Media - they are calling the current global economy - 'pressing the 'reset' button ! like a re-boot! - I firmly believe we'll see an entire paradigm shift as it relates to the global economy - which will be for the better. No longer will countries and major financial institutions expose themselves to the US economy and USA financial institutions.. Most investors large and small won't be going back into stocks - this will make real estate more attractive and gold for that matter!

Why still optimistic about Dubai? UAE? - many reasons.. (and I am not a broker hawking properties!! NPI) Look at the surrounding countries - in the GCC, India Pakistan, Iran, Russia, North Africa and South Africa (the country) - you are looking at a population in the billions - that will be attracted to a 'safe haven' - as the prices adjust downward and Dubai / UAE becomes more affordable - people will move here, set-up their businesses and it will remain attractive. In addition, in the Middle East - they have the largest population under 25 - you don't have that anywhere else in the world... Expect to see more funds coming in from Asia - like Singapore / China / Malaysia / Korea & Indonesia.. These investments are based on long term strategies... What does that tell you?

Be careful what you hear on radio shows, internet etc.. Don't get 'spooked' by rumors. I have seen in many countries whereupon the governing body will 'float' different ideas into the media to gauge reactions. They carefully weigh the feedback and seek consensus. This is very true in Singapore - for example.. and I've seen it in many countries.... If they do officially impose income or corporate taxes here - then it will be time to start packing your bags!! but I seriously doubt you'll see it. A wise attorney once told me - 'Don't bleed if you're not cut' -

If you can hold, you should but be prepared for a 2-3 holding period... By world standards - that will be a quick rebound. Other countries and regions - it will be far longer... The UAE is uniquely situated.. for whatever solace this may offer...
 
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Wannaberich

New Member
Ive said it many times,forget what will happen in dubai in the short-term,look at it from a long term point of view.
Obviously the world economy will stabilise and grow again and everything will get back to normal.When that happends all countries will benefit including Dubai.As for Dubai its a growing city.We are not talking about property prices rising in a stagnate city.Somewhere like London for example which in 5/10 years will look pretty much as it does now.We are talking about somewhere that will have grown much larger in size,will have many fantastic projects completed,the metro,Burj Dubai,biggest mall,Dubailand(scaled down),the palms etc.If prices were as high as they were when none of these places were finished,then think of the values when they are.
In 10 years Dubai will be an amazing city where people will flock to live.If you can say otherwise I'd like to hear why.
 
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PropGuy

New Member
There are plans for corporate and personal income tax, read:
Although no official announcement on imposing uniform taxes has come from the annual summit of GCC leaders in Muscat, Oman, Emirates Business has learnt that such a tax structure is on the way. Economists maintain that discussions to form such a monetary union have been in place for the past two years.

"This was inevitable. They cannot go on forever this way. Taxes will only help (GCC countries) remain competitive," said John Wright, the former Chief Executive of Oman International Bank and Gulf Bank of Kuwait.

A tax structure implies that governments will start earning local currency, which is crucial for the potential creation of a local-currency government bond market. "This will enhance government cash-flows, and could also prepare the ground for an active local bond market," said Armen Papazian, a Dubai-based economist.

Plagued with volatile oil prices that have plummeted to a fourth to where they stood six months ago, the GCC states plan to impose taxes on individuals and businesses. People close to the matter said that such a tax structure is unlikely to be imposed unilaterally. And preparations need to be in place before the final plunge. Going by basic economics books, a tax structure may raise inflation, analysts said.

"The pan-GCC tax structure is based on the existence of the region as a monetary union. There are certain issues that need to be fixed before such a structure comes into place. The GCC customs union has still not become effective in a way that it is meant to be. The fact is that if one has an industrial licence he may not be required to pay customs duty when exporting goods from one country to another. But then, a trading company still has to pay customs duty from port to port within the region," said Jeetendra Chauhan, the Director of UHY Saxena, a Dubai-based accountancy firm.

The GCC countries would not be in a hurry to impose taxes, Chauhan said, citing the fact that none of the countries have any infrastructure in place to impose taxes.

"It's not that the oil prices will remain low for years to come. The fact is that each of these countries has had a tax structure in place for long. But that goes to individual ministries instead of a body specifically meant for the purpose," he said.

Absence of income tax has been the largest attraction for corporations and individuals in the region. All the GCC economies have aggressively competed with each other to open free zones wherein the companies are not taxed. Dubai, and in fact the UAE, has particularly led the way.

There are 29 free zones in the country and nine new ones are coming up. Dubai alone has more than 20 free zones. Qatar and Saudi Arabia have aggressively joined the wave – with Qatar focusing on finance and science and technology companies and Saudi Arabia on manufacturing industries.

"It remains to be seen how the GCC countries will append a new tax structure to these free zones. Taxes may derail investments in these zones. After all, it's not that all the resources used for manufacturing come cheap here," said Chauhan.

Personal taxes remain a bottleneck, said analysts. "I doubt that they would come to an unanimous decision on this. Income tax is one of the main draws to attract highly qualified foreign human capital and breaking this sacred rule could damage that internationally known appeal," said Shayne Nelson, Regional Chief Executive of Standard Chartered bank. "There are many other more painless or subtle ways to levy taxes through indirect means with the same benefits for the government. In most developed countries, the bulk of government revenues from taxes are actually not coming from personal income taxes," he said.

Taxes, when imposed, will have to be progressive, said a Dubai-based economist who declined to be named.

"There is a variety of businesses that exist here. So we cannot think of having a uniform tax structure. Some GCC member may not want to tax a particular sector on grounds that it wants to promote it. People with different income slabs may be taxed differently. A uniform flat rate of tax may hamper smaller industries," she said.

The progressive tax structure may in fact be the reason why the tax may not be implemented soon. "We have all known that the matter has been under discussion for the past two years even when the oil prices were high. They need more time to realise how much tax they need to impose on which sector and on which set of professionals," the economist added.

Qatar Financial Centre began operations as a free zone but plans to impose a flat 10 per cent tax on firms registered under its umbrella. Foreign banks are taxed 20 per cent of their taxable income in Abu Dhabi, Dubai and Sharjah. Oil companies pay a flat rate of 55 per cent of their taxable incomes in Dubai and 50 per cent in the other emirates.

On the federal level, UAE plans to impose the IMF-promoted Value Added Tax on its soil in 2010.

Kuwait's cabinet in May 2006 said that it will study a proposal to introduce income tax regardless of the nationality of the taxpayer. It proposed a flat rate of 10 per cent. In August 2007, Bahrain said that it will deduct one per cent from salaries to pay for its unemployment programme, becoming the first Gulf state to tax its residents.

Qatar has a progressive tax structure for businesses starting at 10 per cent for companies with turnovers between QR100,000 (Dh100,865) and QR500,000. Such a tax structure on businesses has been in place in the gas-rich nation for the past 15 years.

"The biggest impact would definitely be on government finances as it would bring – as said above – a sense of clarity and the ability to build budgets on known and stable future source of revenues. We can definitely argue that this has already started in Dubai with indirect taxes such as the Salik, the visa fees, municipality fees etc," said Nelson.

Some parts of the Gulf have already entered the terminal decline phase of their oil reserves. For them, levying taxes is of utmost importance, he said.

GCC states will also need to tread a fine line when defining taxes for expatriates and nationals. "The fact is that if a limited liability company (LLC) is taxed in the UAE, it will directly effect the nationals. Every such firm has a 51 per cent stake by nationals," said Chauhan.

A tax structure is also relevant to the creation of active local currency government bond market, Papazian said.

"In order to issue and repay local bonds, governments need local currency cash flows. Today, they do not have such an inflow and they spend their petrodollars locally, while backing currencies with foreign currencies, and pegging the exchange rate. With a new tax structure and additional local currency revenues, governments can now repay local currency bonds, ushering in a new environment where local bonds finance local expenditure, dissociating the link between petrodollar revenues and local expenditure," he said.

http://www.business24-7.ae/Articles/2008/12/Pages/12312008_341e5b222a0d468eb96a4805e238be02.aspx
 
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sasherwani2

New Member
The onLY reason western expatriates do come to this place is to avoid income taxes. PwC has announced in all their recent indirect and direct taxes seminars that UAE shall implement VAT by 2010 and Income taxes by 2012. Is there any reason at all to invest in this place? Unless you love the traffic and the 130 degrees humid heat?? Dubai never had a past just like someone said..and it doesnt have ANY future. All my predictions are coming true...Deira Investments has pulled out of the Palm Deira project and has written off USD 2.2B from their books (sunk costs). The announcement abt Palm Deiras cancellation will be in the news in a couple of weeks. Trump Tower has refunded some of its investors already as they are abt to cancel the project. Springs is selling for AED 1.3 million...
 
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financier888

New Member
The onLY reason western expatriates do come to this place is to avoid income taxes. PwC has announced in all their recent indirect and direct taxes seminars that UAE shall implement VAT by 2010 and Income taxes by 2012. Is there any reason at all to invest in this place? Unless you love the traffic and the 130 degrees humid heat?? Dubai never had a past just like someone said..and it doesnt have ANY future. All my predictions are coming true...Deira Investments has pulled out of the Palm Deira project and has written off USD 2.2B from their books (sunk costs). The announcement abt Palm Deiras cancellation will be in the news in a couple of weeks. Trump Tower has refunded some of its investors already as they are abt to cancel the project. Springs is selling for AED 1.3 million...
Hi Sash

Where did you read this info about an income tax being planned for 2012? Was it issued by the govt? I'd like to see this.... THis will definetly be set-back in attracting investors here - if that is the plan

thanks
 
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sasherwani2

New Member
I have been attending most of the PwC seminars lately as I will be incharge for VAT implementation in my company. PwC has confirmed that the UAE govt wants to provide it the contract for VAT and Income tax implementation. VAT to be implemented by 2010 and IT by 2012. Its in the newspapers already.

http://www.business24-7.ae/articles/2008/12/pages/12302008_d2ecec91e4224cc689a8edc518b615d2.aspx

I believe this will eliminate all chances (if any) of attracting tax-avoiding workforce from the west.
 
A

AEG

New Member
Let's keep hoping for the best

This is a big problem
Taxes already started in one form or another (visa, fines, company charges, services).
The people are already suffering and feeling the pain.
First the small businesses will bankrupt.
Already in IC one can buy a business property for 400DHs per sqft.
We have bought a shop in IC and set up a business (office). First the area was free zone now is no more free zone. Imagine every time they change the status of the area we should close the company and set up another one. And this cost money. Never mind the charges for the visa. I heard different area such as JLT will be restricted to a certain type of business. This will restrict the property owners of selling or letting out the properties.
And instead of easing the situation the government is tightening the belt, but for how long.
The property is the worst scenario – the prices are going down and at the same time the service charges are going up.
The government says Dubai is for the rich and for the tourist, but where those people are, looks are like they disappeared. Emirates is doing a business only from connecting flights (when one airline company starts relying on connecting flights is very bad).
No planning, no proper law, no coordination – this time I am afraid no way out.
Some people in this forum say invest for the future. Ok I agree but I say place with no history might have no future; I prefer to invest in a place with a history.
I am saying all the above just to prevent a further collapses and hope that the government will realize the significance of the matter and will act accordingly


You told me in previous forum that i'm being too loyal to dubai...but actually I'm not ..
In fact, I'm frustrated from the lack of proper and effective government intervention as much as you are. All we are getting is non-sense i.e. more rules and regulations which are making the situation even worse. When this crisis first happened my first response was "Don't worry guys...we are very safe here" But at that time, I didn't know about 1)Dubai's huge debt – Dubai Inc. is overleveraged like most of us! 2)the exit of 200 billion from the banking system. Hence, a local liquidity crunch even before Lehman’s collapse. 3) the poor balance sheet of all UAE local banks....all the credit flowing in the system was coming from international capital markets - which as we all know has frozen up completely.
Bottom line - Dubai is in a very bad situation and doesn't have the financial capability to clean up this mess. They surely want to keep investors happy, but this crisis is much bigger than Dubai can handle!
I hope that you are not under the impression that Abu Dhabi will step in to clean up the mess over here. I think we have all realized by now that this a false notion... They might only intervene if there is a disaster that will tarnish UAE’s image such as Dubai defaulting, but for sure not to sort out Dubai’s real estate mess. Even if Abu Dhabi steps in, it won't be an open cheque approach, nothing is for free…the era of easy money is gone.

The next few years will see Abu Dhabi (and probably Qatar) rising and taking all the credit and attention. They have been very low profile in the last few years despite of controlling all the wealth – adopting a very smart and prudent approach “less talk…more action”. As for Dubai…let’s keep hoping for the best
 
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PropGuy

New Member
he next few years will see Abu Dhabi (and probably Qatar) rising and taking all the credit and attention. They have been very low profile in the last few years despite of controlling all the wealth – adopting a very smart and prudent approach “less talk…more action”. As for Dubai…let’s keep hoping for the best
You can add Saudia too, it has mountain of cash more than Abu Dhabi and Qatar.
 
Fran

Fran

New Member
Dubai property prices 'may plunge 60pc'

Reuters 18 January 2009:
Dubai property prices 'may plunge 60pc'

Dubai real estate prices could fall as much as 60 per cent in 2009 from their peaks in July last year, while Abu Dhabi may slide as much as 20 per cent, Shuaa Capital (SHUAA) said on Sunday.

Real estate prices have fallen by around 40 per cent in Dubai and by around 15 per cent in Abu Dhabi from their peaks last year, Roy Cherry, vice president, research at the Dubai-based investment bank told reporters on Sunday, adding that rents in Dubai are likely to fall some 20 per cent in the next two years.

'Dubai is seeing a negative growth in demand for real estate,' Cherry said.

'At the same time it is seeing an increased output. We think the net result of that is lower occupancy rates, going down to the 80 per cent level which will mean a correction in the rents,' he noted.

Dubai's population was likely to fall 5 per cent in 2009 on job losses, while the population of the United Arab Emirates would ease 1 to 1.3 percent, Shuaa said.

Rental rates for apartments and villas have been levelling off throughout 2008, with an average growth rate of 4 percent and 8 percent respectively, property services firm Asteco said in a report last week.

Rents are expected to continue rising in Abu Dhabi, albeit at a slower pace, due to strong demand exceeding limited supply, Cherry said.

Around 30,000 units are expected to be delivered in Abu Dhabi in 2009 and 2010 compared with 80,000 units, he said.

Rents in the seaside emirate have been spiralling since a regional real estate boom started in 2002 when it first allowed foreign investment in property.

Falling oil prices and fallout from the global credit crunch have since taken their toll on Dubai's once-booming real estate sector, which has shown signs of slowing in recent months.
 
F

financier888

New Member
go figure(s)

Reuters 18 January 2009:
Dubai property prices 'may plunge 60pc'

Dubai real estate prices could fall as much as 60 per cent in 2009 from their peaks in July last year, while Abu Dhabi may slide as much as 20 per cent, Shuaa Capital (SHUAA) said on Sunday.

Real estate prices have fallen by around 40 per cent in Dubai and by around 15 per cent in Abu Dhabi from their peaks last year, Roy Cherry, vice president, research at the Dubai-based investment bank told reporters on Sunday, adding that rents in Dubai are likely to fall some 20 per cent in the next two years.

'Dubai is seeing a negative growth in demand for real estate,' Cherry said.

'At the same time it is seeing an increased output. We think the net result of that is lower occupancy rates, going down to the 80 per cent level which will mean a correction in the rents,' he noted.

Dubai's population was likely to fall 5 per cent in 2009 on job losses, while the population of the United Arab Emirates would ease 1 to 1.3 percent, Shuaa said.

Rental rates for apartments and villas have been levelling off throughout 2008, with an average growth rate of 4 percent and 8 percent respectively, property services firm Asteco said in a report last week.

Rents are expected to continue rising in Abu Dhabi, albeit at a slower pace, due to strong demand exceeding limited supply, Cherry said.

Around 30,000 units are expected to be delivered in Abu Dhabi in 2009 and 2010 compared with 80,000 units, he said.

Rents in the seaside emirate have been spiralling since a regional real estate boom started in 2002 when it first allowed foreign investment in property.

Falling oil prices and fallout from the global credit crunch have since taken their toll on Dubai's once-booming real estate sector, which has shown signs of slowing in recent months.
Hi fran

Good update but i think those unemployment figures are way understated.. These calculations are no doubt based on visa cancellation but does not take into account the number of people that work here on visit visas - which may be as many of 5 to 1. With the retail & hospitality business getting hit hard - and all the industries that support them, the cut-backs and exodus will be far greater..

This stated 20% reduction in rents is also too conservative. You still have many, many investors holding vacant units hoping and praying they will sell within the next three months which is unlikely. Even if they drop their prices to the OP levels - the buyers are simply not there - they will have to rent (most of them) and drop the rental prices to get fill them. With rent-to-buy options which will start to be offered by some developers - tenants who can afford the higher rents will also be decreased which results in more downward pressure on the rents..

I think many of these reseach firms & reports are trying to be optimistic under the circumstance and the other challenge they face, is getting access to 'real' numbers as little is truly available at this point..

Historically, with all these reports that I've been reading over the last few years - they almost always are 'off the mark' if not totally wrong ! This may certainly be the case here... I think it's just too soon to accurately make projections and we'll have a better idea in Q2.. at least in the overall direction and potential recovery curve... time will tell

thanks for your postings... good info nonetheless.
 
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