Seriously considering buying property in Dubai - a few questions

[Wannaberich]

I think you guys are missing a point which I mentioned which is the weak pound.
Yes there are bargains to be had if you live in Dubai,but Chaz is in the UK.Therefore
as the pound has dropped against the dollar/dirham around 30% from last year,
its not a good time to buy if you are a UK investor.
Imagine if he buys a villa for 3m,the dirham is 5 against the pound right now,if it gets up to
6 in a few months then his villa is worth 100K less !

 

[Design Architect]

I think you guys are missing a point which I mentioned which is the weak pound.
Yes there are bargains to be had if you live in Dubai,but Chaz is in the UK.Therefore
as the pound has dropped against the dollar/dirham around 30% from last year,
its not a good time to buy if you are a UK investor.
Imagine if he buys a villa for 3m,the dirham is 5 against the pound right now,if it gets up to
6 in a few months then his villa is worth 100K less !

You are absolutely right about that.

But again - if he sits and waits, money is going to lose more value...
It's a tricky call.
Regards

 

[Brendan R]

You are absolutely right about that.

But again - if he sits and waits, money is going to lose more value...
It's a tricky call.
Regards

you are completely wrong, staying in cash is exactly what one needs to do.

We are in a deflationary world for the next 12 to 18 months.

The value of your cash holdings increases everyday while prices of houses, goods, services, etc... go down.

Cash is king, not property

 

[Design Architect]

Where

Where does he keeps his money is better question? In a bank??? Banks are not safest places - let me tell you!!!

So now - only cash in hand (looking at 100 000+ pounds) is safe bet. How many millioners have such cash in hand???

Regards

 

[Hussein Awadh]

Chaz,

I get nervous on your behalf just by reading a couple of the eager agents trying to Market their Projects. I really wonder how much is reliable.

One member on this forum, Hussein Awadh, Mentioned that DAMAC have and will not cancel any of their projects. Dolphin Towers and Water's edge (Business Bay) are two projects by DAMAC properties that have been cancelled. Business Bay Burjside Boulevard (Another DAMAC project) is currently on Hold.

I'm not saying to stay away from properties in Dubai. On the contrary.... I think if you have the cash to spare and you are thinking of longer term investing in Property then you are at the right place. Properties in Dubai is still under valued when comparing other top cities. Its just the volatility of the property market and laws in Dubai that makes investors loose confidence

Just do your due dilligence when dealing with Developers or agents. My advice to you would be to try and buy ready properties or very close to completion properties. Also consult a solisitor. This is something many investors in UAE have overlooked and i believe a reputable property lawyer will give you better ease of mind.

Get all the facts straight before signing anything. Dont be fooled by advertisements and promises.

Good luck mate

Waters edge was not canceled mate, we currently have a promotion on it... And Dolphin towers are ready and complete AND Handed over in Dubai Marina. We simply changed the name to Waves Towers... Please check your information before posting.

I agree with you on one point. Currently the safest investment is ready properties.

 

[naxal]

Chaz,

I get nervous on your behalf just by reading a couple of the eager agents trying to Market their Projects. I really wonder how much is reliable.

One member on this forum, Hussein Awadh, Mentioned that DAMAC have and will not cancel any of their projects. Dolphin Towers and Water's edge (Business Bay) are two projects by DAMAC properties that have been cancelled. Business Bay Burjside Boulevard (Another DAMAC project) is currently on Hold.

I'm not saying to stay away from properties in Dubai. On the contrary.... I think if you have the cash to spare and you are thinking of longer term investing in Property then you are at the right place. Properties in Dubai is still under valued when comparing other top cities. Its just the volatility of the property market and laws in Dubai that makes investors loose confidence

Just do your due dilligence when dealing with Developers or agents. My advice to you would be to try and buy ready properties or very close to completion properties. Also consult a solisitor. This is something many investors in UAE have overlooked and i believe a reputable property lawyer will give you better ease of mind.

Get all the facts straight before signing anything. Dont be fooled by advertisements and promises.

Good luck mate

Hi Pietman ,
Dont forget to mention Palm Springs by Damac also .Till today ,very little has been done to revive it !

 

[Hussein Awadh]

Hi Pietman ,
Dont forget to mention Palm Springs by Damac also .Till today ,very little has been done to revive it !

And seeing as how Nakheel has postponed the project it might take longer...

 

[shahnaz khan]

Can anyone tell me what is happeningwith Lakeviewtower 1and 2 in Emarites city. - Shahnaz

 

[Roshan]

you are completely wrong, staying in cash is exactly what one needs to do.

We are in a deflationary world for the next 12 to 18 months.

The value of your cash holdings increases everyday while prices of houses, goods, services, etc... go down.

Cash is king, not property

Cash is king for the time being. Property is king when purchased in the long term and sensibly.

As they say, there is no better investment then bricks & mortar.

Regards

Roshan

 

[Brendan R]

sure, if your investment horizon is 25 years + then you will be ok in the end otherwise timing is of the essence like for equities.

It is better to buy when it is on the rebound instead of trying to catch a falling knife.

As you mention, property is for the long term so there is no urge to buy.

best

Brendan

 

[PropGuy]

you are completely wrong, staying in cash is exactly what one needs to do.

We are in a deflationary world for the next 12 to 18 months.

The value of your cash holdings increases everyday while prices of houses, goods, services, etc... go down.

Cash is king, not property

(1) that depends on which currency you are using to buying or selling. Value of UAE properties in most currencies has gone up even with the down fall of prices, because value is directly affected by US$.

(2) US$ has resumed a down ward trend, which would be beneficial for people living in UAE, since UAE property will become affordable again in most currencies of the world.

 

[Brendan R]

(1) that depends on which currency you are using to buying or selling. Value of UAE properties in most currencies has gone up even with the down fall of prices, because value is directly affected by US$.

(2) US$ has resumed a down ward trend, which would be beneficial for people living in UAE, since UAE property will become affordable again in most currencies of the world.

wrong, the USD is not in a downtrend, sterling and euros are. JPY is trending bullishly.

UAE is pegged to the dollar so dollar depreciation would be a negative if you were to buy in the UAE now.

So what you are suggesting is to wait for the dollar to depreciate to make UAE properties attractive again? Well, that will take a while.

Meanwhile staying in cash through a basket of currencies with some gold is the best option. Underwight sterling and euros, overweight US and Asian currencies.

 

[PropGuy]

wrong, the USD is not in a downtrend, sterling and euros are. JPY is trending bullishly.

UAE is pegged to the dollar so dollar depreciation would be a negative if you were to buy in the UAE now.

So what you are suggesting is to wait for the dollar to depreciate to make UAE properties attractive again? Well, that will take a while.

Meanwhile staying in cash through a basket of currencies with some gold is the best option. Underwight sterling and euros, overweight US and Asian currencies.

US$ has resumed downturn trend again. Here is the current USDX:

As for the effects of US$ depreciation on UAE properties, that depends on which currency you are dealing with. Like I said if you are in UAE or US, depreciation of US$ would increase value of property in AED and USD.

And I'm not just saying that, I'm saying that value of UAE property has gone down in AED but for example in GBP it has gone up. GBP went down 40% against AED, but some properties are selling for 20% below peak price, so infact, value of that property is still higher in GBP. That will change when USD devalues, but property prices would go up too.

As for USD trend, it depends on if recession is has bottomed. USD is inversely related to recession because all the banks in world use USD as main currency, so when there is recession value of USD always go up globally. This is because all the banks block USD supply in times of recession but govt starts to print more USD at this time. When recession ends there is more USD supply in the market compared to the start of recession so USD inflation kicks in very fast and bigger than before. This is what is happening if you look at USD history for last 50 yrs.

So in the expansion phase, inflation is expected to be double digit. This whole commodity boom started when fed increased the USD supply in last recession at the end of 2001. This time feds are injecting USD supply at least 5 times more than injections in the last recession.

 

[TommyC]

On top of that, because of the huge US debts, once things start going inflation could be really high to make up for those debts.

 

[Brendan R]

US$ has resumed downturn trend again. Here is the current USDX:

As for the effects of US$ depreciation on UAE properties, that depends on which currency you are dealing with. Like I said if you are in UAE or US, depreciation of US$ would increase value of property in AED and USD.

And I'm not just saying that, I'm saying that value of UAE property has gone down in AED but for example in GBP it has gone up. GBP went down 40% against AED, but some properties are selling for 20% below peak price, so infact, value of that property is still higher in GBP. That will change when USD devalues, but property prices would go up too.

As for USD trend, it depends on if recession is has bottomed. USD is inversely related to recession because all the banks in world use USD as main currency, so when there is recession value of USD always go up globally. This is because all the banks block USD supply in times of recession but govt starts to print more USD at this time. When recession ends there is more USD supply in the market compared to the start of recession so USD inflation kicks in very fast and bigger than before. This is what is happening if you look at USD history for last 50 yrs.

So in the expansion phase, inflation is expected to be double digit. This whole commodity boom started when fed increased the USD supply in last recession at the end of 2001. This time feds are injecting USD supply at least 5 times more than injections in the last recession.

first of all, you show a 5' chart of the USD index to prove the USD is correcting. I'm not convinced. The USD strenghtening started back in early 2008. OK it's correcting in the very short term but the odds are in favor of the USD keeping on strenghtening. Don't fight a bull market.

If the USD depreciates, the AED will depreciate so if you are a foreign investor you are worse off. If I were a UK based investor, I wouldn't buy now as I would be buying an asset in a depreciating currency. Your argument seems to be that should the USD depreciate, the increase in home prices will offset the currency loss. Very doubtful and unproven.

Now again, calling the bottom between you expect the recession to end is questionable.

Sorry but I wouldn't buy anything in the UAE based on your arguments.

Best

Brendan

 

[PropGuy]

first of all, you show a 5' chart of the USD index to prove the USD is correcting. I'm not convinced. The USD strenghtening started back in early 2008. OK it's correcting in the very short term but the odds are in favor of the USD keeping on strenghtening. Don't fight a bull market.

If the USD depreciates, the AED will depreciate so if you are a foreign investor you are worse off. If I were a UK based investor, I wouldn't buy now as I would be buying an asset in a depreciating currency. Your argument seems to be that should the USD depreciate, the increase in home prices will offset the currency loss. Very doubtful and unproven.

Now again, calling the bottom between you expect the recession to end is questionable.

Sorry but I wouldn't buy anything in the UAE based on your arguments.

Best

Brendan

You are jumping to conclusions and read again. As for USD it is falling when there is no recession news, it only goes up with some bad news. If there is no more bad news about the economy then it will only fall, which is obvious for anybody who has been monitoring.

I don't know whether UAE property prices will offset the currecy loss, but currently they are better in GBP. Anybody who is selling above -30% is making a profit.

 

[PropGuy]

Chart I used for GIM forum, and 5min candle sticks are useful for predicting turn around.

Anyway below is daily 1 year chart and downward trend is clearly visible since mid dec.

 

[Brendan R]

so what are your price targets on USD vs EUR and vs GBP?

I'm short GBP sinceJanuary 08 @ 1.99

I'm seeing a perfect alignment of 1 USD = 1 GBP = 1 EUR in 18 months.

Acceleration will come once people realise there is no quick fix to the current mess. Deflation will last much longer than everybody expects.

 

[Wannaberich]

so what are your price targets on USD vs EUR and vs GBP?

I'm short GBP sinceJanuary 08 @ 1.99

I'm seeing a perfect alignment of 1 USD = 1 GBP = 1 EUR in 18 months.

Acceleration will come once people realise there is no quick fix to the current mess. Deflation will last much longer than everybody expects.

Hello Brendan.
The pound is up from a low of around 1.35 to around 1.43 on the back of some positive from Barclays etc.Also George Soros said today he expects the pound to settle around 1.40 for the time being.
What makes you think it will go down to 1 USD = 1 GBP?

Personally I would love to see it that low as I am trying to sell property in Dubai
and bring the money back to the UK.

 

[PropGuy]

so what are your price targets on USD vs EUR and vs GBP?

I'm short GBP sinceJanuary 08 @ 1.99

I'm seeing a perfect alignment of 1 USD = 1 GBP = 1 EUR in 18 months.

Acceleration will come once people realise there is no quick fix to the current mess. Deflation will last much longer than everybody expects.

GBP rebound from historical trend line @ 1.36 (it dipped to 1.35) which was a false break of the trend line. It is not expected to go below that trend line so far, but who knows. Technical indicators are +ve, which is positive sign, but that depends if no serious bad news comes out, although, it will go through corrections from time to time but with up ward trend. I was long since the rebound from 1.35, closed my positions today. Waiting to go short if I see clear sign of correction.

Euro is weak but it is good to hold for long term.