Serious concern about UAE Property Market

[georgihh]

How do you know that?No-one seems to have figures for how many people are moving to Dubai.There are alot of properties empty looking for tenants.

The demand dictates the market (rental).
Ok some buildings are empty in Dubai marina or JBR but not many can afford to pay 120000 DHS for one bedroom.
Look at International city – 50000 people moved in last year and the place is almost fully occupied
Now they are going to demolish Satwa – Where the people will go – Nowhere
Or they will pay double rent?
I think they will pay double rent
Have you bought in Dubai?
How many land registrations have you done % from your purchase.
This is going to be the new movement in Dubai no land registration – no resale or cant even rent out
In this case 80% of the properties are not real.

 

[Wannaberich]

The demand dictates the market (rental).
Ok some buildings are empty in Dubai marina or JBR but not many can afford to pay 120000 DHS for one bedroom.
Look at International city – 50000 people moved in last year and the place is almost fully occupied
Now they are going to demolish Satwa – Where the people will go – Nowhere
Or they will pay double rent?
I think they will pay double rent
Have you bought in Dubai?
How many land registrations have you done % from your purchase.
This is going to be the new movement in Dubai no land registration – no resale or cant even rent out
In this case 80% of the properties are not real.

If people cannot afford 120.000 for a 1 bed then they will have to reduce the price.This will then reduce the prices for other 1 beds in less desirable areas.
How can people in Satwa afford to pay double,they are on low income?

Regards land registration.Does this mean that from now on every property must be registered?How do I find out if my building is registered?

 

[petelles12]

The cost of 1 barrel of petrol is around 7 USD is Saudi Arabia. The selling price is 130 USD. In all sectors, 10 % net profit is excellent while in petrolioum case hundreds of billions of dollars are coming from the desert.

In the center of this wealth, we are discussing about how much this city can grow ? It was 1.5 million, is not it ? Every year they are going to buy hundreds of companies mostly to be managed from Dubai.

When you put some sugar on the ground, immediately ants will jump on that. In this city, with 130 USD petrol price, I believe many ants will be coming here. Collect as much as sugar before new ants. I hesitated and purchased from more expensive.

The only risk I am seeing that America/Israel - Iran clash. I believe that this is real risk, they are not role playing.

Kind Regards,

 

[fws]

Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?

I just need to hear their views about whats goin on with contractors in this market.

Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.

When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.

The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.

Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.

If they cant, then they will delay it until they can afford it or get finance help from the banks.

Just wanted to share this concern in the market right now.

Inv.

I understand that this must be a major concern for many developers, but like investors they gambled. Many developers sold their units years ago, working on the principle that they could bank the money brought in by stage payments and make more money by delaying the projects. This has now gone spectacularly wrong as inflation, especially in construction costs, has risen phenomenally.

The reputable developers like Cayan, start their projects within a few months of first sales and accordingly are able to manage their finances better. Other developers like Damac started selling Ocean Heights back in early 2005 and have only just started building. The question is why?

Again, the Cayan project Infinity went spectacularly wrong when the marina wall collapsed yet Cayan have delayed payments and put back the date of completion rather than just not telling people when the development is going to finish, like so many developers in Dubai.

The rising building costs are a real cause for concern - especially for developers who have sold all the units years before completion. I just hope that many people do not come to lose their money as some developers fall by the wayside.

 

[vanityfair]

The doom and gloom being portrayed on this thread makes hard reading especially after investing in a studio in Sports City.
I still feel that is a long way for the Dubai property market to go.
Remember Dubai is still lagging behind all major commercial cities with the property values under half that of others. When there has been a long period of substained growth as in Dubai it is only natural to expect a downturn.

 

[Wannaberich]

Developers falling by the wayside is a good thing for Dubai in the long run.Unfortunate for those who have given them money.There are too many shady and unprofessional developers and too many developments going on and threatning an oversupply.
Late starts on projects and rising material and labour costs all add to the delay of the price correction caused by oversupply that most are predicting for 2011/2012.
Personally I would like to see the Dubai goverment put a stop to all new launches as from now.
For all those who brought at least 6months to 1 year ago for projects that have been started,rising costs are a good thing.Prices per Sq Ft for new launches will have to be higher to allow for extra costs thus dragging up the prices of existing projects.
I didnt listen to the doom merchants a year ago when I brought a 1 bed,and now completed its worth around 60% more.
I read alot about all the people who are supposedly moving to dubai yet I don't see any official figures .The chronic shortage of office space is slowing down the influx of workers
which again will add to the threat of oversupply.

 

[Investoman_uae]

Ok, something positive for a change.

People will always want to live in Dubai. Even with the little issues it has. It is still a great city to live in, compared with other major cities of the world. It offers its residents something that is not offered elsewhere and thats luxury living, it comes as standard.

The Government need to sustain this growth by removing any obstacles out of the way. Its not difficult. They have the capabilties of solving any problems that come in the way.

For example, the Administration aspect, especially in the big companies. It needs to be more professional and efficient. They need better customer service, phone calls need to be answered, customer problems need to be solved. The buraucracy that is slowing things down need to be sorted out.

Also the Government need to bring more regulations, more control, more maturity to the market. People want their rights protected, whether in buying/selling transactions, or registration, etc... they need their investments protected and secured.

So this is how Dubai will sustain growth and development across the board. Not just Dubai, but all the Emirates need to enhance and innovate on all grounds.

Inv.

 

[Wannaberich]

For example, the Administration aspect, especially in the big companies. It needs to be more professional and efficient. They need better customer service, phone calls need to be answered, customer problems need to be solved. The buraucracy that is slowing things down need to be sorted out.
Inv.

This is a big problem in Dubai.They need more European workers in administrative positions.

 

[Roshan]

If people cannot afford 120.000 for a 1 bed then they will have to reduce the price.This will then reduce the prices for other 1 beds in less desirable areas.
How can people in Satwa afford to pay double,they are on low income?

Regards land registration.Does this mean that from now on every property must be registered?How do I find out if my building is registered?

If the property is not registered you cannot call it yours. There were ads on the paper which clearly said that you cannot call it yours if you have not registered. In fact that's done when the developer hands over the property to the owner.

Regards

Roshan

 

[Wannaberich]

If the property is not registered you cannot call it yours. There were ads on the paper which clearly said that you cannot call it yours if you have not registered. In fact that's done when the developer hands over the property to the owner.

Regards

Roshan

Isnt it the case that the developer registers the building as opposed to owners registering their own units? Plus this is done even if the building isnt complete?

 

[Roshan]

Isnt it the case that the developer registers the building as opposed to owners registering their own units? Plus this is done even if the building isnt complete?

You have to get the title deed of your investment in your name.

I think that's the 1% that the developer charges and gets the apartment registered in your name.

Regards

Roshan

 

[memo123]

So when i Finish my instalments I still have to pay 1%

You have to get the title deed of your investment in your name.

I think that's the 1% that the developer charges and gets the apartment registered in your name.

Regards

Roshan

Dear roshan ,
This was not mentioned in any of the papers I signed.
I believe I have been mislead . The developer told me that the contract for now is the offering paper that i fill with installments and all agreement terms and signed by the developer . I can sell the property based on these papers and it is a matter of paper work that takes about 2500 Dirhams as transfer charges and not a % of the value of the property , also isn't the whole building registered in the city where the building is located , lets say jumairah south, i was told that i get the final contract from the jumairah south village people ? or sports city? I know in my country , we have to go to court and register the property of i have paid all the installments , other wise it stays in the bank's name that financed the property for me . So I pay court charges and registration charges were 2% of the value of the property but now it is a fixed fee, to encourage people to invest and register thier properties, for before this law was imposed , a property changes hands 5 times and not even registered once .
please advice me .
I asked the developer for the contract and the developer told me that i will get it from the city and not him?????????????? their papers are all in order RERA, ESCROW I CHECKED ALL .
REGARDS

 

[memo123]

Originally Posted by Investment_uae
Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?

I just need to hear their views about whats going on with contractors in this market.

Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.

When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.

The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.

Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.

If they cant, then they will delay it until they can afford it or get finance help from the banks.

Just wanted to share this concern in the market right now.

Inv.

Investoman is right with the fact that the developers do collect installments and more installments and put them in banks earning measly interest rates , while commodity prices like steel, sand, and cement prices have gone through the roof . In my country we have to import sand today at 150% of what they were of 6 months, that is if you are lucky to get it in time , and some people if u don't have guards near your building site , will come and steal ur sand in the middle of the night. Also steel is up 200% in the price from last September , so who ever promised quality at certain prices one year ago and haven't started building yet , is doing it at
huge losses. Don't be surprised if these developers start mixing more sand than cement and cheat in the building material and provide very bad finishing , just to meet cost .
also microeconomics says when demand meets supply we reach equilibrium and market stabilizes and if there is any increment in the prices of the properties it will be minimal like 2.5 to 3 % like Germany and Europe.
and from what I have seen in Dubai and saw it with my own eyes when Nakheel canceled our appointments . Almost all the people that got in while we were out in the heat , were coming out with huge grins , then people chase them and offer them 7% and 10% for units that they just bought 30 minutes ago, this is in addition to the 2% transfer charges the the second purchaser will have to pay to the developer . it is like a fast forward movie, and it made me sick to the stomach. All of these buyers were not end users , they were all speculators, and that is how prices are inflated based on nothing , it reminds me of the in INTERNET bubble , where some stocks don't even exist any more , and of the Almanakh stock crash in the early 80's in the gulf where people lost their shirts .
If you had come to me 5 years ago and told me to buy in Dubai i would buy blindly , but today it is a different type of market altogether. and no one can predict when it will crash but we have seen evidence of three different companies canceling projects , and giving investors non-logical reason's. wait until one of these big ones fall and it will be like a snow ball.
SO in conclusion i say easy come easy go the same way these properties are going up so high so fast in the year 2010 they will go down so fast , i predict that is when we will reach equilibrium and demand meets supply.
regards
P.S. Sorry for all the gloom and doom but I am a realistic person and believe things in Dubai have gone mad, and in abu dhabi it started mad.

 

[kamikaze]

I have been advised to invest into a project called Al Badrah by Nakheel. Please view link Nakheel unveils Badrah district at Waterfront

Have been informed that the launch will have thousands of people queuing all night.

I am interested to purchase and thereafter Flip this investment in a short period of time at 25%-30% Premium.

Nakheel will be launching Al Badrah this forthcoming Sunday (phase 1)

Approx prices:
Studio-493sqft-685,000AED
1br-655 sqft-980,000AED
2br-907sqft 1,220,000AED
3br-1286sqft-1,820,000AED
2br townhouse -1179sqft-1,900,000AED
3br townhouse -1638sqft-2,285,000AED

Plse can someone gve me advice on above...

Dear Investor, Diyou buy nething in al badrah.If u did den gud cuz badrah is at a premium of 15% now and is expected to reach 25% at the end of this month after the second launch.If u did not get nething do hurry and get sumthing I have a cuple of units available .Get in touch for more assistance. my e mail is [email protected]

 

[Vicks]

Originally Posted by Investment_uae
Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?

I just need to hear their views about whats going on with contractors in this market.

Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.

When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.

The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.

Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.

If they cant, then they will delay it until they can afford it or get finance help from the banks.

Just wanted to share this concern in the market right now.

Inv.

Investoman is right with the fact that the developers do collect installments and more installments and put them in banks earning measly interest rates , while commodity prices like steel, sand, and cement prices have gone through the roof . In my country we have to import sand today at 150% of what they were of 6 months, that is if you are lucky to get it in time , and some people if u don't have guards near your building site , will come and steal ur sand in the middle of the night. Also steel is up 200% in the price from last September , so who ever promised quality at certain prices one year ago and haven't started building yet , is doing it at
huge losses. Don't be surprised if these developers start mixing more sand than cement and cheat in the building material and provide very bad finishing , just to meet cost .
also microeconomics says when demand meets supply we reach equilibrium and market stabilizes and if there is any increment in the prices of the properties it will be minimal like 2.5 to 3 % like Germany and Europe.
and from what I have seen in Dubai and saw it with my own eyes when Nakheel canceled our appointments . Almost all the people that got in while we were out in the heat , were coming out with huge grins , then people chase them and offer them 7% and 10% for units that they just bought 30 minutes ago, this is in addition to the 2% transfer charges the the second purchaser will have to pay to the developer . it is like a fast forward movie, and it made me sick to the stomach. All of these buyers were not end users , they were all speculators, and that is how prices are inflated based on nothing , it reminds me of the in INTERNET bubble , where some stocks don't even exist any more , and of the Almanakh stock crash in the early 80's in the gulf where people lost their shirts .
If you had come to me 5 years ago and told me to buy in Dubai i would buy blindly , but today it is a different type of market altogether. and no one can predict when it will crash but we have seen evidence of three different companies canceling projects , and giving investors non-logical reason's. wait until one of these big ones fall and it will be like a snow ball.
SO in conclusion i say easy come easy go the same way these properties are going up so high so fast in the year 2010 they will go down so fast , i predict that is when we will reach equilibrium and demand meets supply.
regards
P.S. Sorry for all the gloom and doom but I am a realistic person and believe things in Dubai have gone mad, and in abu dhabi it started mad.

Could this be a perfect example of the way things are going now. IMHO, as i stated before, the buyers are doing all the chasing and getting fobbed off at the end of it but now it seems that the developers cant seem to get any buyers.......

Repesentative from DAMAC have sent me three emails so far, the most i got since property development has started in Dubai and Abu Dhabi. They are actually starting the chase !

Dear Sir,



Hi! I just wanted to give you some more reasons as to why you should invest in SOLITAIRE today:-



1. THERE IS NO MORE NEW LAUNCHES HAPPENING BY ANY DEVELOPERS IN REEM ISLAND UNTIL OCTOBER KEEPING IN MIND THE PRICE RISE BY WHICH THEY WILL BE LAUNCHING IN ATLEAST FOR A MINIMUM OF 3000 + PSF RATE, REST ASSURED!!

2. We Are the First to Launch in The Maysan region of Reem island.

3. The Maysan area has made sure that overall 55 % of the land is kept free for paths and parks, children’s playgrounds, bicycle routes and minimal surface parking.

4. The Solitaire Project is excellent in Architecture and Design making it very easy to furnish

5. It is a 100 % residential Project.



I have also attached an updated Document containing some facts about Maysan in Najmat Abu dhabi. Kindly check the document and feel free to contact me on +971501894743 if you have any questions. Hope you will not miss out on this excellent opportunity to make superb ROI! Hurry! We are already running out of the remaining floors we have!! Thank you and have a nice day!!





What do you think? Good deal?

 

[Roshan]

Originally Posted by Investment_uae
Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?

I just need to hear their views about whats going on with contractors in this market.

Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.

When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.

The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.

Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.

If they cant, then they will delay it until they can afford it or get finance help from the banks.

Just wanted to share this concern in the market right now.

Inv.

Investoman is right with the fact that the developers do collect installments and more installments and put them in banks earning measly interest rates , while commodity prices like steel, sand, and cement prices have gone through the roof . In my country we have to import sand today at 150% of what they were of 6 months, that is if you are lucky to get it in time , and some people if u don't have guards near your building site , will come and steal ur sand in the middle of the night. Also steel is up 200% in the price from last September , so who ever promised quality at certain prices one year ago and haven't started building yet , is doing it at
huge losses. Don't be surprised if these developers start mixing more sand than cement and cheat in the building material and provide very bad finishing , just to meet cost .
also microeconomics says when demand meets supply we reach equilibrium and market stabilizes and if there is any increment in the prices of the properties it will be minimal like 2.5 to 3 % like Germany and Europe.
and from what I have seen in Dubai and saw it with my own eyes when Nakheel canceled our appointments . Almost all the people that got in while we were out in the heat , were coming out with huge grins , then people chase them and offer them 7% and 10% for units that they just bought 30 minutes ago, this is in addition to the 2% transfer charges the the second purchaser will have to pay to the developer . it is like a fast forward movie, and it made me sick to the stomach. All of these buyers were not end users , they were all speculators, and that is how prices are inflated based on nothing , it reminds me of the in INTERNET bubble , where some stocks don't even exist any more , and of the Almanakh stock crash in the early 80's in the gulf where people lost their shirts .
If you had come to me 5 years ago and told me to buy in Dubai i would buy blindly , but today it is a different type of market altogether. and no one can predict when it will crash but we have seen evidence of three different companies canceling projects , and giving investors non-logical reason's. wait until one of these big ones fall and it will be like a snow ball.
SO in conclusion i say easy come easy go the same way these properties are going up so high so fast in the year 2010 they will go down so fast , i predict that is when we will reach equilibrium and demand meets supply.
regards
P.S. Sorry for all the gloom and doom but I am a realistic person and believe things in Dubai have gone mad, and in abu dhabi it started mad.

the telling signs of a crash eh

When people buy like what you mentioned, people should start getting worried. More people buying because X,Y,Zee made money gets the developer all wound up...and the result is inflation of prices.

I am happy with what I bought 3 years back and a serious correction should not rock the boat. Will see how these will move before making another.

Regards

Roshan

 

[stylinexpat]

the telling signs of a crash eh

When people buy like what you mentioned, people should start getting worried. More people buying because X,Y,Zee made money gets the developer all wound up...and the result is inflation of prices.

I am happy with what I bought 3 years back and a serious correction should not rock the boat. Will see how these will move before making another.

Regards

Roshan

Agreed, new projects are being launched at over 2K per square foot while finished projects in Dubai Marina and JLT are being sold at around 1500-1600 per square foot. 1600 for something now or 2000+ for something 3 years down the road

 

[LuckyNumber]

1600 now should be a lot more than 2000 in 3 years inflation adjutsed and compounded, even at official inflation rates! Think present and future value of money.

 

[memo123]

You are so right

1600 now should be a lot more than 2000 in 3 years inflation adjutsed and compounded, even at official inflation rates! Think present and future value of money.

buy somthing at 1600 now ready better than paying 2000 instalments for 2 years
just do NPV and u will see what big difference it makes
most importantly this money is jammed and cant use it in anything keeping it to use it for istalments so you earn nothing on it while waiting to pay for the next instalments , that is if you get stuck and cant flip it fast

 

[Roshan]

buy somthing at 1600 now ready better than paying 2000 instalments for 2 years
just do NPV and u will see what big difference it makes
most importantly this money is jammed and cant use it in anything keeping it to use it for istalments so you earn nothing on it while waiting to pay for the next instalments , that is if you get stuck and cant flip it fast

Much better if cash available, buy ready properties and gain instant ROI of 9% which of course excludes the appreciation.

Buying off plan is a big head ache at times. The projects tend to get delayed. I have 2 projects which are delayed by over a year

Regards

Roshan