Dubai Bubble Bursts

[Wannaberich]

What happened was a classic bubble and it's shocking that more people did not see it coming sooner.
.

Hysterical.The whole world was in a bubble that just collapsed and no sucker saw it coming.
Lets get one thing clear,Dubai was going along very nicely till America screwing up hit the rest of the world.So please dont put it down to Dubai not getting it right.

As for a few delays,etc,staff lay-offs,And?!What do you expect with this climate?!
You guys talk like its the end of the world for Dubai and its completely collapsed.

Dubai will ride the storm like every other country out there and then take off again when the economies pick up.Theres no reason whatsoever to think otherwise.

In the meantime,to all the doom and gloom merchants,see if you can pick up a bargain and maybe that jealousy will subside.

 

[Ayyan]

Thanks guys; I am actually surprised coz I wasnt expecting many of u would agree to my blunt views about Dubai. Dubai "could" have been a wonderful place had it focused more on doing things "right" instead of doing things "bigger and faster". As another forum member said "Dubai will go down in the books as a royal tragedy".
What exactly do people want when they move to developed countries? Job security? Good value for money? Better living? Better weather? Better infrastructure? A better life perhaps?

Dubai did it all wrong.

With the bubble bursting, more and more ppl are losing jobs and almost everyone I know is concerned about losing his/her job. There are no laws protecting the unemployed. Heck your kicked out of the country the moment you lose your job. No residency laws here even if you have served the country for 30+ yrs!! No green cards, no immigration..nothing.
Dubai made it more and more difficult to survive for the middle class. Even substandard projects like IC had a rental of AED 80-85k for a one bedroom apt. You can rent a 3 bedroom HOUSE in a decent location in the US with that price. Something was seriously wrong here.
Dubai paid no attention to fixing the traffic situation. It was like it was given 5 yrs to make as much money as it could without thinking abt the future. All the major projects (Burj Dubai, Dubai Mall, JLT, JBR, Marina, DIC, DMC, TECOM, Old Town, MOE, Downtown, ET etc etc) were built on Sheikh Zayed "knowing" that Sheikh Zayed Rd wont be able to handle the traffic. Today Sheikh Zayed looks like a parking lot for most part of the day. There's no alternate mean of reliable transport but "Saliks" have been added to encourage using the nonexistant "alternate" means of transport. Its a nightmare on the roads. I see atleast 2 accidents every single day. RTA still blames it on the drivers!
As the predictions and fears become facts (Trump Tower cancellation, Meraas holding all their projects, Nakheel downscaling the Waterfront etc),we all need to learn a lesson. Infact the whole world will learn a strong lesson from the failure of Dubai. "Work hard to build a strong middle class". Dont make them squeeze their wallet to an extent that they find it hard to survive anymore. Dont make them spend all their incomes on rent! They deserve some disposable income for the more important things in life like family and their kid's education. Dont make them spend hrs and hrs on the road because work itself is stressful enough.

I hope we all learn a lesson as we watch the Titanic sink.

Dubai will recover just watch this space !!

more and more middle class housing will come on the market

 

[DelboyG]

AvidUser - Busted !!

Today is U.A.E. national Day - let us all celebrate the day that this great nation was formed as one - many nationalities coming together to help build the country for the good of all.

I really do love the UAE and Dubai in particular - I committed to the city 10 years back and now consider it my home (stupid for an Expat, I know).

I was here long before this property boom and although it was a bit like the wild west, things and life where good. If you could put up with the heat there was the opportunity to have a high standard of living.

Those were the days when you could drive from Sharjah to Jebel Ali in 30mins on wide open roads, when you could walk out of a building, put your hand up and a taxi would be there to take you anywhere within 1 min. When SZR was just the road to get to Jebel Ali or Abu Dhabi. When I could take my 3 hour lunch break and take the family down to the beach for a swim. How much better that was than the rat run of the UK where I left from.

In those days there was planned development, a building in Karama could only be 4 stories high, maximum for Bur Dubai was 8 floors so you could see the rational behind the limits, plenty of land so spread out the population and not allow any area to become congested.

Life was good and we would say 'we work hard, but we play hard too!'
Now all that was good in Dubai is gone - they've bough the rat race that I escaped to Dubai.

I missed the start of the property boom as I was pumping the money into my honest business, I regretted that, not because I missed out on the premiums / profits, but because I missed the chance to own a part of this city. Then when they announced that property did not entitle you to a residency visa, I know what the game was - it's simple to anyone with half a brain, who need a house that you can only visit? (and now for only 1 month before you have to leave?).
I had hoped that due to the property boom they would finally open up and allow anyone to gain permanent residency. That really is the ONLY hope for the property market in the UAE now, if it doesn't happen this will all go down as:

'The biggest and best marketed - "PYRAMID SCHEME" in world history.
The terms 'selling ice to the Eskimo's' or 'selling sand to the Arabs' come to mind.

I'm sorry that people will loose a lot of money, you really have bough just sand (off plan = SAND),but I'm more sorry for many people like me, who were working to build a nation of peace and tolerance, that have now had all the market liquidity sucked into high rents and costs.
Old Dubai would have hardly noticed this world wide credit crises, but now we are going to suffer big time with the rest of you as there is no liquidity left.

Please understand that all the talk of 1000's psf, premiums and rental yeilds is just marketing talk. I live in a 1BR apartment where the rent is AED.55 psf, I work in a 1400sf office in Bur Dubai at AED.50 psf. Both of my landlords are totally ignoring the marketing blurb and just happy that they have a good customer who will never bounce a cheque. So Old Dubai will not take your properties and the hordes that rushed to New Dubai will rush out just as quickly as they came.
I'm feel lucky that I'm in a better position than many to ride this time out.

Now, I'm one of the few people here in a position to buy, but given the numbers above what is the incentive when I'd pay 50% of the above in maintenance fees alone and still not be a stakeholder in the country.

This is the reality my friends, take the numbers above, double them (because I've been here a long time and had the rent cap),and then you get an idea of possible rental incomes.

This pyramid scheme, like all others worked when the money and people were flooding in, but what happens to any scheme when people and companies are on the way out? The ones left are the losers yes?

I've angry with our leader, he has really lost the plot and been blinded by his own marketing and stupid advisers. Now we will all pay for this folly, locals and expats alike.

Happy national day !!

 

[Wannaberich]

I've angry with our leader, he has really lost the plot and been blinded by his own marketing and stupid advisers. Now we will all pay for this folly, locals and expats alike.

Thats one way of looking at it.Others like myself admire him for the vision he has for Dubai.Its become a place where fantasy can become reality.Where a designer/architect can let his imagination run wild and build the kind of project that just wouldnt be allowed anywhere else.
Of course you have to feel sorry for the locals who mostly never asked for all this.Even though they are helped financially by the goverment I'm sure many wish it went back to how it was especially the old ones.
Dubai isnt the first city that grew at a rapid pace to become unrecognisable and it wont be the last.

 

[DelboyG]

Thats one way of looking at it.Others like myself admire him for the vision he has for Dubai.Its become a place where fantasy can become reality.Where a designer/architect can let his imagination run wild and build the kind of project that just wouldnt be allowed anywhere else.
Of course you have to feel sorry for the locals who mostly never asked for all this.Even though they are helped financially by the goverment I'm sure many wish it went back to how it was especially the old ones.
Dubai isnt the first city that grew at a rapid pace to become unrecognisable and it wont be the last.

DoBuy,

I hope you can see from my post that I am not one of people here to speculate, I really do love Dubai and wish I could settle here. I love the freedom of expression that has developed in this land. I expected change and I knew it would not stay the same - what I did not expect was a stupid gold rust that was clearly short term and not in this counties interest, it's gone 100% against the policies that had taken the nation so far in just 30 years.

Fantasies need to have a grounding in reality to become real, Unless we the people that are building this nation are recognized for our work and respected, by giving permanent residency, this 'New Dubai' will all turn to dust as the desert reclaims it's own.

You understand that it takes hard work and commitment to hold nature & the desert back, right? how will this happen if 80% of the population is regarded as disposable?

Property is nothing (Zero) if someone cannot call it his home, it's just sand if you don't have a customer or end user to live there. Unless you want to depend on an ever increasing rotation of migrant workers whose primary objective is to send money back to their home country?

Don't you see the fundamentals here - there are people like me who want to make Dubai a home and will not do it because the residency rules, there are people who are here to make work, money and send it out of the country and there are the locals - which of these 3 groups will buy into the available property?

I say none of them will, Dubai & the UAE is making sure it's not in their (customers) interest to do so, but they are the customer (buyer) in the end, so everything else, biggest tower, metro, palm island, any other project is totally irrelevant to the 'Customer or End User'

If you notice in my posts I'm not talking about any particular project or even Emirate, be it Dubai, Abu Dhabi or RAK, wherever or whatever. If the customer cannot call the place they are buying a home - then it IS just a pyramid scheme.

Some will fall for the trick, but the majority who are willing & ready to part with the money will not. These are the people you need to satisfy or just give it all back to the desert.

I'm telling you that I am OK here old Dubai - the desert has many building site to reclaim before it'll reach me. The big question is what will Dubai become after the storm ??

Happy national day !

 

[revolutionary]

I see interesting thoughts in what you all write.

I do believe properties became overpriced but they could have justified those high levels if only the recent 'clarifications' on the laws designed to control the market had not been so short sighted.

Owning a bit of a unique stunning Dubai with guaranteed sunshine in winter is a lot more tempting than a lot of the half-baked Costas. However the following things have changed since I gulped at the prices 2 years ago, and cringed even harder at the hotel/rental prices back then. (However I did notice that my cheapo hotel room that cost more than the best I was used to in Holland, was actually far more luxurious than that top-notch Dutch place)

Freehold but then the 'maintenance' charges are more than renting equivalent places elsewhere. There genuinely does need to be freeholder control over community maintenance but that seems to have just been all talk. I certainly don't want to be held over a barrel by my developer charging me for fixing his own mistakes and supporting his bankrupt company through his overpriced maintenance team.

Freehold but no resident visa. That rules out retiring and drawing pension at 0% - huge potential loss of buyers who could afford Dubai. Not sure even if I would be allowed to return from working in Europe every weekend so that could rule out the mobile corporates like myself again with the money to buy at the old prices and who would enjoy the 0% tax too.

Freehold office but no guaranteed work visa. This really ought to be clarified since small dynamic buisinesses will not come unless there is some certainty.

I'm not concerned about the Law 13. Those who agreed to buy off-plan agreed to a contract. What should be tackled is the cavalier offering of mortages to get the deals which then vanished. Also developers not sticking reasonably to their contracted schedules should be good enough reason to get money returned - 100% plus interest. That should then see some action.

The big projects must go ahead as they give inspiration for the whole place. If a lot of second-rate developments get cancelled that should be good in the long term.

 

[Ayyan]

Del Boy this time next we will be millionaires !!!

I have a freehold villa here and I have no intention of leaving

They will give me a residents visa and every 3 years it will be renewed , I even have a title deed what more can the GOVT do ?

 

[DelboyG]

Ayyan,

Del Boy this time next we will be millionaires !!!

I have a freehold villa here and I have no intention of leaving

They will give me a residents visa and every 3 years it will be renewed , I even have a title deed what more can the GOVT do ?

Make sure your visa is stamped by the by the Shiek's office, any thing else is worthiness!!

What a total joke this has become!

Now we are selling oil and sand to the west!!!

 

[monsi]

No payment defaults on Dubai luxury units

http://www.business24-7.ae/articles/2008/12/pages/12012008_5b4a5a94530c4b7fb41a6a2cf3c28e5a.aspx

Dubai is not witnessing payment defaults on high-end properties by buyers, according to the Real Estate Regulatory Agency (Rera).

"Every project on the ground and under construction would be completed. Master developers are intact and the high-end third party developers may find alternatives to carry on with their projects through bulk selling of units to private equity funds and hedge funds," Marwan bin Ghalita, Chief Executive Officer, Rera, told Emirates Business.

"We recently saw a sales transaction for a Dh24 million property. Ultimately, the fate of a luxury property will depend on the affordability of a buyer."

Ghalita said lending in the market would have to be eased in order for real estate buying to increase and gain momentum.

He told Reuters that developers should review their projects that had not yet been launched, or where only a few units had been sold.

"This is not a good time to start a new project if you don't have enough liquidity to construct. Slowing down is very important and this is what we at Rera asked the developers to do about a year back. Slowdown and review is very important for the real estate market," he said.

Prices for "affordable" off-plan properties could pick up in the second quarter of 2009 if banks increase lending, he said.

Ghalita said Rera would enforce a law on the registration of off-plan property sales.

Rules for time shares were also being finalised.

"People will be selective in where they put their money. It's not like before where people came to buy anywhere," he said.​

 

[Vicks]

Yes, at last, someone with a sensible intuition rather than talking like they saw hindsight before anyone else. 'didnt anyone see this coming sooner? Someone got a glass ball that can tell the furture eh?

This was America doing. They buggered up and trying to take the whole world down with them and systematically caused a period of lending to stop. This will come back but with a decent LTV.

The whole world was in a bubble but no could speculate when that bubble would burst. When purchasing, a majority of investors (me including) looked at it at a long term view and also with a view of not putting all your eggs in one basket.

Dubai will come, as will the UK , as will the whole world. Its a cyclical effect. Next time round will not see much lending but there will be lending on appropriate LTV.

Bargains out there? Not too sure about that. There have been speculative emails stating bargains galore but it all come down to nothing. Is there really bargains out there?

Shortage of housing? well, if you look at it this way, that Dubai to build so many dwellings by a certain date, this target will not be reached if Developers stop developing. The same thing is happening in the UK. Uk has a target. But developers cannot build due to the mortgage lenders not being able to lend. This brings down prices, but hey, 1 year down the line, no developments on housing means there still is a shortage, banks starts to lend then what will happen? Only way i can see is the price starting to rise.

The same will happen to Dubai. They will be helped by Abu Dhabi, if they give a share of Emirates away to them.

Also places won't be bought anywhere. People will be more fussy on where they want to buy. Prestige locations, The Palm, Business Bay and eventually near DubaiLand when Tourism for this area will rocket.

This is just my point of view. I believe these fundamentals keep me going in investing in selected countries.

Hysterical.The whole world was in a bubble that just collapsed and no sucker saw it coming.
Lets get one thing clear,Dubai was going along very nicely till America screwing up hit the rest of the world.So please dont put it down to Dubai not getting it right.

As for a few delays,etc,staff lay-offs,And?!What do you expect with this climate?!
You guys talk like its the end of the world for Dubai and its completely collapsed.

Dubai will ride the storm like every other country out there and then take off again when the economies pick up.Theres no reason whatsoever to think otherwise.

In the meantime,to all the doom and gloom merchants,see if you can pick up a bargain and maybe that jealousy will subside.

 

[Wannaberich]

Yes, at last, someone with a sensible intuition rather than talking like they saw hindsight before anyone else. 'didnt anyone see this coming sooner? Someone got a glass ball that can tell the furture eh?

This was America doing. They buggered up and trying to take the whole world down with them and systematically caused a period of lending to stop. This will come back but with a decent LTV.

The whole world was in a bubble but no could speculate when that bubble would burst. When purchasing, a majority of investors (me including) looked at it at a long term view and also with a view of not putting all your eggs in one basket.

Dubai will come, as will the UK , as will the whole world. Its a cyclical effect. Next time round will not see much lending but there will be lending on appropriate LTV.

Bargains out there? Not too sure about that. There have been speculative emails stating bargains galore but it all come down to nothing. Is there really bargains out there?

Shortage of housing? well, if you look at it this way, that Dubai to build so many dwellings by a certain date, this target will not be reached if Developers stop developing. The same thing is happening in the UK. Uk has a target. But developers cannot build due to the mortgage lenders not being able to lend. This brings down prices, but hey, 1 year down the line, no developments on housing means there still is a shortage, banks starts to lend then what will happen? Only way i can see is the price starting to rise.

The same will happen to Dubai. They will be helped by Abu Dhabi, if they give a share of Emirates away to them.

Also places won't be bought anywhere. People will be more fussy on where they want to buy. Prestige locations, The Palm, Business Bay and eventually near DubaiLand when Tourism for this area will rocket.

This is just my point of view. I believe these fundamentals keep me going in investing in selected countries.

Agree with u.People should stop looking at Dubai as in what will happen in the next few months/2 years.Its about what will happen long term.

I keep reading lending will commence Feb/March and this is when the market will pick up.Hope so.

 

[revolutionary]

I've just been checking prices for JLT on the GNads website and the asking prices don't seem to have reduced although the true reality is the prices that actually sell. I would be very happy to receive the amounts being asked less 20% as I've made more than the 20% since the bubble burst due to the concurrent devaluation of the pound.

Does anyone have any real deal prices so we can have a sense of what is actually going on? I guess deals on immediately available places are more likely to have happened recently and would be a better guide for the prices real end-users are still prepared to pay rather than the speculators who have run for the hills to lick their wounds.

 

[georgihh]

I've just been checking prices for JLT on the GNads website and the asking prices don't seem to have reduced although the true reality is the prices that actually sell. I would be very happy to receive the amounts being asked less 20% as I've made more than the 20% since the bubble burst due to the concurrent devaluation of the pound.

Does anyone have any real deal prices so we can have a sense of what is actually going on? I guess deals on immediately available places are more likely to have happened recently and would be a better guide for the prices real end-users are still prepared to pay rather than the speculators who have run for the hills to lick their wounds.

If the property is ready 1200 DHS per sqft is reasonable
If off plan – nobody buys

 

[Ayyan]

but who would want to buy in jlt anyway

the best deal in town right now is remmraan

 

[georgihh]

but who would want to buy in jlt anyway

the best deal in town right now is remmraan

Nobody buys piece of paper anymore.
Only ready properties will have value next year
The off plan is going to be 20% less than the completed units and the percentage depends on the status of the building.
Remran is going to sink very soon.
The people have learned the lesson and if they don’t see the key ,
they don’t bother

 

[Ayyan]

Bloomberg.com: Exclusive

Read this i think we should all be very very worried

 

[manman]

My 1 bed is going to be ready next month. its in Tecom Two Towers Tower A. I paid 1325 AED per square foot. I am thinking of selling it in the market now. Can anyone give me an idea if cost pls 8% profit is the right price and will i be able to find a buyer?

I will really appreciate your thoughts

 

[TommyC]

My 1 bed is going to be ready next month. its in Tecom Two Towers Tower A. I paid 1325 AED per square foot. I am thinking of selling it in the market now. Can anyone give me an idea if cost pls 8% profit is the right price and will i be able to find a buyer?

I will really appreciate your thoughts

And post this in the right thread...as you saw, the topic was "Dubai Bubble Bursts" not "Estimated price of manman's property".

 

[TommyC]

Here we go, next announcement: Global crisis forces Dubailand review - The National Newspaper

 

[DelboyG]

Busted!!

I really don't see why I am still seeing posts here about Dubai's return to the glory days of ever increasing house prices. Dubai & the UAE have cut 99.9 percent of the prospective customers out of the property buying chain by not allowing permanent residency.

I know of many UK retirees, who could have a good life drawing their pensions with 0% tax in Dubai, enjoying the sun and sand, however, it's not allowed to retire here, so lets just forget those customers.

There are many mobile workers, who have lived the life moving to 'where the work is', Dubai could be ideal for them with it's 0% tax, but low and behold, you will not be a resident even if you buy!

UK, the USA, Singapore, Hong Kong all have residents in school or college now, who will marry, raise a family and need a place to live in, right? What does Dubai and the UAE have? Rotating migrant workers who are on 1 (get that) 1 month notice to leave this place.

Understand that if you are resident in the UK, USA you will never be forced to leave, you can and will be under pressure, but in the end you can stay until you find a way out of your current problems.

Dubai has what? Migrant workers on very low salaries, who can never afford the rents, much less to buy the available property, these are the people who are on 1 month notice and expected to do the following:

Clear their DEWA bills.
Clear their Etisalat or Du bills,
I'm not sure about this yet, but to clear the communal building maintenance bills.
Get 'No objection letters' for all the above.
Find a new school for your children in the country of residence.
Find transportation for your furniture , rented or permanent housing (for your family) in your country of residence.
Put your mortgaged property up for sale.
Find a buyer, proceed the sell agreement.
Get the transfer registered with the 'Land department'
Get !No Objection letter! from the bank for property sale
Pay all your fines / registration to Sell your car,
Pay you car loans, rent loans etc with the bank.
Clear your credit cards & loans
Get 'No objection letter' from the all the above.
In this time you can be on a watch list in the airports, not to leave the country and any one of the creditors above can instigate this.

Possible jail time for any one of the above presenting a bounced cheque.

All of this (and more) when you have 'NO JOB' & 1 month to action in full before you start paying AED.100 per day in overstay fees.

Are you people so stupid to think that anyone what half a brain is going to sign up for this ****? you already have only 0.1% of the world (I say the full world) population who will buy into it, then take a good look at what they (the rest) are going buying into!

Truly stupid people!!!! - Go and ask your financial adviser about this, folly?

You are asking the people to buy into a 'Pipe dream', that they already knew was a pipe dream. and has zero grounding in reality.

I say once again and for the last time, If these stupid residency laws are not changed, UK, US and the rest WILL recover after the storm, Dubai WILL NOT!

You really can't expect that people will fall for this 'PYRAMID SCHEME' again & again, you people as developers or speculators can believe as much as you like - keep selling to each other at ever increasing prices, one day you will understand 'it is all just sand'.

The rest of us will leave you to your sand, and just hope you enjoy the taste after, I just don't think it'll be good food for you families,but hell, keep pumping the money in, keep paying the developers to 'Market' properties that can never, ever see one day of this countries wonderful sunshine.

Last post from here -

DG