Property investment in Dubai

[Wannaberich]

I can understand those who have already invested in Dubai, and those with businesses dependent upon Dubai property, trying to be positive and "talk up" the situation. but I really do not understand why there would still be folks out there actually looking to invest in Dubai. Goodness knows where the buyers are going to come from for the properties already being built or being put on hold. Even if the prices have hit the bottom surely only those who have a big enough portfolio to take the risk of losing all can seriously think of investing. Ghost towns- surely they are within Dubai already? The sheer scale of all the building works cannot be comprehended without seeing it first hand- and even then its mind boggling.
I really sorry for all those caught up in this- I think a few years back, if we had had the money at the time, we might have bought and now been in a similar situation. It all looked a certain bet then...

There's no point being negative about the prospects for Dubai without explaining why you hold that view.
Personally I am positive about the future for the following reasons.The worlds economies will recover and so will Dubais.Once businesses start growing again and new staff are employed then the population in Dubai will rise.These new residents will fill the empty units.As the price for office space has now plummeted,this will make Dubai hugely attractive for new businesses to move to.]
Also,as the price for completed properties and rental has plummeted this reduces greatly the cost of living in Dubai which will greatly encourage new residents to move there.As off-plan is now dead,there will become a time when all of the empty units will be filled.With no new units on the market oversupply will become undersupply and hence prices will rise.
Meanwhile the metro continues to grow,new commercial/tourist projects get completed.More hotels making for more competition and lower prices and more tourists.A few theme parks brings in more tourists.Emirates continues to grow,add new routes,other airlines increase their flights to Dubai,the second airport takes more flights,more tourists,creates many more jobs etc etc.
I'm not saying prices will grow faster than other countries but I do think if you buy when prices hit bottom then in 5 years you would have made some money.

 

[Wannaberich]

It amazes me that the Dubai government are sitting back and watching the real estate market and Dubais credability collapsing around them.
It will get to a stage, if it hasn't already, where investers will not touch Dubai as the property market is to volatile and the developers cannot be trusted.
I certainly would never invest in Dubai again, and certainly would not recommend it as a place to buy.

The Dubai goverment is broke so maybe limited in what it can do or is prepared to do.Also it seems now AD calls some of the shots.
As for not trusting developers,yes if you are talking about off-plan but then again only an idiot would buy off-plan.
However please tell me what the risk is with buying a completed unit?

 

[Brendan R]

To me, the attractiveness of Dubai going forward still needs to be demonstrated, now that the argument "build it and they will come" has been debunked and that the main industry in Dubai has crumbled, i.e. real estate.

The negatives I see:

- Dubai is only "enjoyable" 6 months a year: October, December, Jan, Feb, March and April when temperatures are below 40 degrees.

- Servicing a property in Dubai is and will remain extremely expensive: Dubai has no access to fresh water for instance. This will impact the expect profitability one can expect to extract from an investment.

- Jobs prospect not that great: where will jobs come from? What industry? Where will growth come from for Dubai now that the buzz is gone? If you're fired from your job, can you find another job within 30 days?

- The city is extremely expensive and what is sold to you as duty free is 50% more expensive than in the UK. Duty free is a myth. Yes it existed in 2002 and before but now it is long gone.

- there are not many beaches you have access to. Clubs are unbelievably expensive, like 300 dirhams a day at the Mina Seya.

- Dubai cannot build anymore malls, there are already too many. Now that almost everything has been built, what next?

The positives:

- Dubai will remain a great tourism destination

- for 6 months a year, Dubai is very enjoyable and could be very appealing to retirees for instance.

Please add to the positives/negatives

 

[fiona123]

Its going to take a heck of a long time for oversupply to turn to undersupply. In the meantime if you are buying a unit to live in longterm then you probably won't get a better time(if you get the location right). But not for investment. What risk is there in buying a completed unit? I would have thought that was obvious- the risk being that other completed units in the same development are not bought/occupied.
As I said, those involved in the property industry in Dubai will talk up the future. Those with property will look at the most positive outlook they can - as I would do in their situation.

 

[pinnacle1]

Property failure.

Dubai was a dream. The Dubai ruler had what he thought was a wonderful idea, where unique skyscrapers would tower over the city and man made islands would bring in the rich and famous and companies would flock to Dubai to set up their businesses. Unfortunatly the ruler did not take into account the theiving, money grabbing developers, who saw an opertunity to rack in millions of pounds at the investers expense. Instead of clamping down on these developers they allowed them to rob investers blind. Which is very strange when it is a muslim country that won't allow someone to kiss in public, but will allow developers to steal. The governments pathetic attempt to control this was to introduce RERA, which is a toothless department that does nothing for the invester but continues to allow developers to continue breaking the laws at will. Dubai needs proper real estate laws, not ones that say if investers don't pay they will have their property repossessed . There are legitimate reasons why some investers are not payingm, and these should be looked at by RERA and dealt with accordingly, not just advised see a lawyer, who in turn will rip you off. I have contacted eight lawyers, two of them were recommended by RERA, not one of them are willing to take on developers, which leads me to assume the lawyers have been instructed by the Dubai government that they are not allowed to take action against any developer.

If I am being synical, please advise me of one case where a lawyer has taken a developer to court, has won the action and the invester has had a full refund. Because I would like to use him.

 

[amplesou]

Dubai was a dream. The Dubai ruler had what he thought was a wonderful idea, where unique skyscrapers would tower over the city and man made islands would bring in the rich and famous and companies would flock to Dubai to set up their businesses. Unfortunatly the ruler did not take into account the theiving, money grabbing developers, who saw an opertunity to rack in millions of pounds at the investers expense. Instead of clamping down on these developers they allowed them to rob investers blind. Which is very strange when it is a muslim country that won't allow someone to kiss in public, but will allow developers to steal. The governments pathetic attempt to control this was to introduce RERA, which is a toothless department that does nothing for the invester but continues to allow developers to continue breaking the laws at will. Dubai needs proper real estate laws, not ones that say if investers don't pay they will have their property repossessed . There are legitimate reasons why some investers are not payingm, and these should be looked at by RERA and dealt with accordingly, not just advised see a lawyer, who in turn will rip you off. I have contacted eight lawyers, two of them were recommended by RERA, not one of them are willing to take on developers, which leads me to assume the lawyers have been instructed by the Dubai government that they are not allowed to take action against any developer.

If I am being synical, please advise me of one case where a lawyer has taken a developer to court, has won the action and the invester has had a full refund. Because I would like to use him.

tell this to the oasis mob on here !

 

[Wannaberich]

Its going to take a heck of a long time for oversupply to turn to undersupply. In the meantime if you are buying a unit to live in longterm then you probably won't get a better time(if you get the location right). But not for investment. What risk is there in buying a completed unit? I would have thought that was obvious- the risk being that other completed units in the same development are not bought/occupied.
As I said, those involved in the property industry in Dubai will talk up the future. Those with property will look at the most positive outlook they can - as I would do in their situation.

How long before oversupply turns into undersupply? 3/4/6/7 years?And.
Are you one of those investors who expect to make a million overnight?
As for the risk in buying a completed unit next to the others in that building being empty,errrr,how about buying a unit in a building you know to have a very good occupancy rate.

 

[Wannaberich]

Please add to the positives/negatives

Positives:
Apart from what I wrote in my earlier post.

Tax Free
Extremely low crime rate.Very very significant.
Extremely cheap services such as maids,cleaners etc.
Sleazy behaviour common in UK not tolerated in Dubai.
Possibility of idylic lifestyle.





Negatives:
Foreigners have little rights.
Police force is a joke so make sure you never get into trouble.
Goverment cannot be trusted.
Dangerous to live with partner if not married.
Chronic traffic problems with worlds most dangerous roads.
Can't screw the neighbours wife without risk of jail.

 

[fiona123]

no I don't expect to make a million overnight. My other investments up and running are also in cities where I intend to keep them longterm and income is steady but not spectacular short term. Its good to see that some people still think Dubai is a good bet- I didn't think there were too many of them around anymore. But then, buying to live in it, and buying purely for investment - perhaps that is what makes the difference in viewpoints.

 

[bawany]

service charges

Yes I agree however that is mainly to do with off-plan sales which are now thankfully dead.Now you have a situation where you can buy COMPLETED properties for less than off-plan was being sold a while ago.So wheres the risk with completed?no-where near as the same risk as off-plan infact I struggle to find a risk.
Do you know any?

Watch out Service charges- the developers are making money one way or the other- the sevice charges are very high

 

[Wannaberich]

Watch out Service charges- the developers are making money one way or the other- the sevice charges are very high

A new law has been passed which allows owners to get together and decide which company they wish to carry out maintenance etc.
This will mean lower charges.

 

[Catherine4u]

How long before oversupply turns into undersupply? 3/4/6/7 years?And.
Are you one of those investors who expect to make a million overnight?
As for the risk in buying a completed unit next to the others in that building being empty,errrr,how about buying a unit in a building you know to have a very good occupancy rate.

Well I guess buying a completed unit is better than one which is not complete yet. At least you can rent it out. And yes, buying a unit in a building with high occupancy rate is something intelligent.

 

[Catherine4u]

you're absolutely right, location location location.

Dubai's hopes for growth have been redimensioned to a lower scale. It means less population growth, less income growth, less wealth creation.

The prospect of ghost towns in certain parts of Dubai is absolutely not a remote possibility. Other parts of town will keep their value.

If you buy in Dubai, first of all don't buy offplan.
Then make sure water, electricity and all are working. That you are close to major amenities (malls well frequented such as the Emirates mall but not Ibn Batuda for instance) and the community you are moving in has already some neighbours. Check for schools, hospitals, blah blah.

Avoid what could become a ghost town in the town at any cost.

In short you are saying that a person should go for buying a completed property and not the one in which facilities are unavailable. I get you point. But how a place could become a ghost town?