18-24 Month Recession

[Djjunior]

There has been a lot of talk about a 2 to 3 year "global" recession, affecting Middle East, Africa, Europe, Asia and North America. Remember, a 2-3 year recession is serious stuff, which would be even longer than the 16 month recession in 1970's. If this is the case, and with less global borders, whats your take on property markets in Dubai or your place of residence.

I live in Toronto and Dar-es-salaam/Tanzania... I personally think property prices could drop another 30-40 % in Toronto and 60-70% in Tanzania as they have had a huge run up in the last 3 years.

Whats your assessment on property markets where you live?

 

[Fran]

In Dubai the situation is different, as we are waiting for the Property Index to be introduced in the beginning of 2009. Basically, the Government will regulate the lower and the upper limit brackets for the prices in different areas. This will stabilize real estate prices and limit speculations. In a long term works well for buyers and sellers.

Personally, I don't think that there will be huge price variations. Maybe the price brackets will be fixed in the range between 5% to 10%.

 

[Wannaberich]

In Dubai the situation is different, as we are waiting for the Property Index to be introduced in the beginning of 2009. Basically, the Government will regulate the lower and the upper limit brackets for the prices in different areas. This will stabilize real estate prices and limit speculations. In a long term works well for buyers and sellers.

Personally, I don't think that there will be huge price variations. Maybe the price brackets will be fixed in the range between 5% to 10%.

I haven't heard of a property index only a rental index.Are u sure?

 

[TommyC]

In Dubai the situation is different, as we are waiting for the Property Index to be introduced in the beginning of 2009. Basically, the Government will regulate the lower and the upper limit brackets for the prices in different areas. This will stabilize real estate prices and limit speculations. In a long term works well for buyers and sellers.

Personally, I don't think that there will be huge price variations. Maybe the price brackets will be fixed in the range between 5% to 10%.

Sounds optimistic to me, just because they determine what the right prices are doesn't mean there will a demand for that price, unless it's appealing to the low/middle-class of Dubai = prices < AED 1000 psf. Yes, Dubai is different, but not immune as they try to calim, the government is making up regulations as they go along to fit their needs, which in terms means that the laws change from day to day and it will still take a lot of time until they have an idea how they should do it. Hopefully the price index can stop all the speculating developers looking to make an easy buck.

 

[georgihh]

Sounds optimistic to me, just because they determine what the right prices are doesn't mean there will a demand for that price, unless it's appealing to the low/middle-class of Dubai = prices < AED 1000 psf. Yes, Dubai is different, but not immune as they try to calim, the government is making up regulations as they go along to fit their needs, which in terms means that the laws change from day to day and it will still take a lot of time until they have an idea how they should do it. Hopefully the price index can stop all the speculating developers looking to make an easy buck.

The price index is going to be for the rental. The market will settle down early next year and everything will be back to normal. Average price of 3000$ per sqm will stay for some time.

 

[Djjunior]

Tommy C

Low to Middle Income Housing in actual sense is housing in the 50-60 K range for a 50-60 sm q home. Thus roughly 300 dhs/ sqft. That's the only way middle income people in or from developing countries can afford to make mortgage payments relative to their salaries. Ex. $50,000 for a home equates to roughly $400- 500 a month in mortgage payments, so a family earning $1000-$2000 per month combined, can actually afford to buy a home. This is how it works in Africa, India, Pakistan, China etc... But for that to happen in Dubai land and construction costs need to fall.

 

[TommyC]

Tommy C

Low to Middle Income Housing in actual sense is housing in the 50-60 K range for a 50-60 sm q home. Thus roughly 300 dhs/ sqft. That's the only way middle income people in or from developing countries can afford to make mortgage payments relative to their salaries. Ex. $50,000 for a home equates to roughly $400- 500 a month in mortgage payments, so a family earning $1000-$2000 per month combined, can actually afford to buy a home. This is how it works in Africa, India, Pakistan, China etc... But for that to happen in Dubai land and construction costs need to fall.

My mistake, apparently we are talking about rental here. AED 1000 psf/year is definitely to much then AED 300/psf for buying? I don't think that will happen.