Who to blame for the current downturn?

[georgihh]

1. Developers for selling off plan at enormous mark up.
2. Developers for advertising heavily overseas and attracting innocent people to sink the money in the bush
3. The government for letting the supply to take over the demand, not regulating the business and stop issuing visas
4. The agents for trying to screw up the investors at any cost.
5. RERA for protecting the developers instead of the investors
6. The financial crisis - I don’t think has done much damage as the above points

 

[Fran]

I blame you, because it seams you have nothing better to do, but sit in front of your PC and type negative posts, dragging down everything and every one.

More over, I am suspecting that some one is paying you to poison the virtual world by creating a `Vicious Circle on Downside’.

Get a girlfriend, or if you can't, go get drunk........find a way to break the vicious circle and move ahead!

 

[renter1]

1. Massive trade surpluses run by Asia were reinvested back into the West, leading to low interest rates and a resultant credit bubble. The virtuous circle of credit extended not just to individuals, but also to developers (and state entities) in Dubai. Global deleveraging has made it almost impossible to borrow from international banks, putting the squeeze on all the firms and indiviudals who have overborrowed.

2. In the UAE in particular, speculation on a Dirham revaluation led to large hot money inflows. Rather than sitting on these deposits or investing them in government CDs, the local banks lent them out to homeowners and property-related business. When the inflows reversed and turned into outflows earlier this year, the banks became (and still are) exceedingly short of cash. This is why EIBOR remains so stubbornly high and is curtailing bank lending.

3. The UAE business model is being attacked from all sides - oil falling 70%, global trade collapsing, tourism dropping sharply and a sick real estate sector

 

[Fran]

Go forward

Regional markets are better positioned to weather the turmoil than almost any other market in the world because of the strong overall fundamentals.

However, the appetite for risk aversion - and hence equities - is clearly at a low at present, but this will change as normality gradually returns in the markets.

Big spenders in the region either can’t afford to stop spending, or can afford to spend and will do so to support local economies.

In the government sector, spending will continue as governments try to support local business, and because they need to carry on investing in crucial sectors like healthcare and education to meet the needs of a growing population.

For banks and other financial institutions, putting systems in place to manage compliance and other data management issues can’t be seen as an optional extra for the region any longer.

In the telecoms sector, while operators are likely to slow down on implementing the most cutting-edge technology, many are government owned businesses, operating in de-regulated markets - they need to spend to stay in competition.

While big bang projects are likely to be shelved, consultancy and services projects that help get the most out of existing infrastructure, and outsourcing by western companies looking to cut costs, will keep the region’s service sector busy.

Bullish approach could be a realistically aggressive way to tackle a difficult situation!

 

[georgihh]

I blame you, because it seams you have nothing better to do, but sit in front of your PC and type negative posts, dragging down everything and every one.

More over, I am suspecting that some one is paying you to poison the virtual world by creating a `Vicious Circle on Downside’.

Get a girlfriend, or if you can't, go get drunk!

You lose, I lose, and everybody lose so calm down
Instead of getting drunk or divorce my wife and find a girl friend I prefer to save some cash for the rainy days.
I will tell my sponsor to stop paying me as I upset you and the photographer
I have made millions of dirhams posting in this forum but it is time to stop
By the way let me know what have you got for sell and maybe I can help

 

[Fran]

"....it is time to stop."

Now the common sense got the best out of you.

 

[financier888]

Regional markets are better positioned to weather the turmoil than almost any other market in the world because of the strong overall fundamentals.

However, the appetite for risk aversion - and hence equities - is clearly at a low at present, but this will change as normality gradually returns in the markets.

Big spenders in the region either can’t afford to stop spending, or can afford to spend and will do so to support local economies.

In the government sector, spending will continue as governments try to support local business, and because they need to carry on investing in crucial sectors like healthcare and education to meet the needs of a growing population.

For banks and other financial institutions, putting systems in place to manage compliance and other data management issues can’t be seen as an optional extra for the region any longer.












In the telecoms sector, while operators are likely to slow down on implementing the most cutting-edge technology, many are government owned businesses, operating in de-regulated markets - they need to spend to stay in competition.

While big bang projects are likely to be shelved, consultancy and services projects that help get the most out of existing infrastructure, and outsourcing by western companies looking to cut costs, will keep the region’s service sector busy.

Bullish approach could be a realistically aggressive way to tackle a difficult situation!

I agree - having lived through these markets in the USA and the Asian Financial crisis - I firmly believe that this is one the best markets you can be in and will have the fastest rebound... for many reasons... The whole global economic model is going through a paradigm shift - this region will greatly benefit from it. In the months ahead you will see new players and new infusions of capital coming into this market.. The key is not to overreact and panic. The current price correction is the best thing that could have ever happened here... It will attract long term investment which this market needs for long term sustainabilty.

Months ago the 'flippers' and speculators were demonized for driving-up the prices and killing the markets... Now that prices are adjusting downward to more resonable levels, some people are seeing all 'doom & gloom' !! if you bought at the top of the market and prices are adjusting downward - that was the risk you chose... If you have a long term pespective - you can still have valuable asset that will appreciate but long gone are the days of the quick buck!

Adjust your sights and expectations accordingly. It's up to you to determine - are you in the for long haul or not? if not, this is not the market for you.

 

[MASHH]

blame Free masons !!!!

 

[financier888]

blame Free masons !!!!

that's funny... I thought it was because of the Illuminati???

 

[Sally1980]

I blame you, because it seams you have nothing better to do, but sit in front of your PC and type negative posts, dragging down everything and every one.

More over, I am suspecting that some one is paying you to poison the virtual world by creating a `Vicious Circle on Downside’.

Get a girlfriend, or if you can't, go get drunk........find a way to break the vicious circle and move ahead!

Heey Fran,

How can you shut down an honest opinion like that...

Let me tell you something:

1. You don't score points by copy pasting possitieve statements from local newspapers just to keep up the spirit. I have been reading so often how strong the dubai economy and fundamentals are, how they (are and) will not be effected from the global economic crisis that makes me sick.


2. Please step out of your nice cosy bed, and see what is going around outside in the real world of Dubai. People are getting sacked in hunderds, others leave early due to the loans they probably can't pay, talk to shop owners in Dubai mall, investors... It is easy to loose confidence, but takes long time to build it again...


3. It is a fact that investor confidence has been hurt, due to abrupt changes in the laws that have hurt investors:

- No Visa's anymore while invesotors bought on the promise of receiving residence Visa
- loosing 30% of paid monies, changed to 30% of total propert values in cae of default


4. Developers were increasing prices like crazy without doing proper research on REAL demand (both public and private),promting short term investments by asking 5% downpayment and re-sell promises in 2-6 months. Failing on buy-back gurantee's, delivery promises and many other issues...


5. Investors like george are the market, and instead of shutting them down, you should listen to them...


6. And at last I would like to know who is paying you to pretend it is sunny during storm...


Now, before you put me off too as a pesimist, I would like to tell you that I do blieve that market is going to revive again, but not before these issues have been dealt with...

 

[Fran]

Hi Sally,

your effort for setting the record straight is not appreciated as you state facts, which you can't prove, eg.: "step out of your nice cosy bed" and "copy pasting positive statements from local newspapers". Maybe I am behind a desk writing some of the statements and just willing to help the public by popularizing it...just maybe.

Now, back to the topic, the global financial crisis is a fact since months. Projects are scaled back, the layoffs numbers are growing by the day, investors lost a lot. (Personally: 70% in stocks and 20% in property......until now).

However, people who have problems, lost jobs and investments etc., are on the survival run already finding solutions. They don't waste time complaining and nagging, or wondering at whom to point the finger and blame. The easiest answer is: Blame your self for your decisions!

It is very naive to imagine that some sort of petitions or emails between lengthy mailing lists etc. will help. Any one who knows a bit about the region, the country, the religion, the government system and in general about the local orders, will confirm if.

Business isn't about adjusting the world around you, it's about adjusting yourself to get the business done.

At last, loser's attitude is really annoying and destructive, and causes stress and tension.

Cheer up, as long as we are alive (watch Gaza now),healthy, smart and work hard, the sun will shine for us!

 

[Sally1980]

Hi Sally,

your effort for setting the record straight is not appreciated as you state facts, which you can't prove, eg.: "step out of your nice cosy bed" and "copy pasting positive statements from local newspapers". Maybe I am behind a desk writing some of the statements and just willing to help the public by popularizing it...just maybe.

Now, back to the topic, the global financial crisis is a fact since months. Projects are scaled back, the layoffs numbers are growing by the day, investors lost a lot. (Personally: 70% in stocks and 20% in property......until now).

However, people who have problems, lost jobs and investments etc., are on the survival run already finding solutions. They don't waste time complaining and nagging, or wondering at whom to point the finger and blame. The easiest answer is: Blame your self for your decisions!

It is very naive to imagine that some sort of petitions or emails between lengthy mailing lists etc. will help. Any one who knows a bit about the region, the country, the religion, the government system and in general about the local orders, will confirm if.

At last, loser's attitude is really annoying and destructive, and causes stress and tension.

Cheer up, as long as we are alive (watch Gaza now),healthy, smart and work hard, the sun will shine for us!

Heey Fran,

Please put on your glasses next time you read...

I never said "step out of your nice cosy bed" and "copy pasting positive statements from local newspapers" are facts. What I mentioned as a fact was:

"It is a fact that investor confidence has been hurt, due to abrupt changes in the laws that have hurt investors:

- No Visa's anymore while invesotors bought on the promise of receiving residence Visa
- loosing 30% of paid monies, changed to 30% of total propert values in cae of default"

One thing which is true, is that ofcourse partly, we are the blame for the messes we get ourselfs into. We get cought up in the hipe, we don't read contracts properly, we expect all others to act ethically and as they promise. . . But there are things that can be improved too by the Developers, Real Estates, Government AND these have to be mentioned. Only by tackling these chalanges, Dubai's economy will recover and might come out even stronger.

And not by shutting others down, just because they have complaints or because they undertake effort, trying to make a change. You have to understand that for many people their hard earned money and savings are at stake...


Btw, What do you mean by:

"It is very naive to imagine that some sort of petitions or emails between lengthy mailing lists etc. will help. Any one who knows a bit about the region, the country, the religion, the government system and in general about the local orders, will confirm if."

And what has religion got to with all these??? You are mixing up things again...

 

[Fran]

Sally,

unfortunately, I have no time to get engaged in useless conversation. Sorry, but enough was written already, if some prefer to remain stuck in their own vicious circle on the downside, that's their choice.

I, personally, have chosen to accept the new order and adjust my self with the intention to remain in the market.

Recovery has to begin from somewhere, and if there is nothing else, hope and belief could be the driving forces.

Good luck!

P.S.: A great place for shouting is Hatta mountain, because the echo is laud.

 

[dubister]

NO REGULATIONS is to blame for the downturn. Because investors + end users have no protection, while all the big whig developers whom speculatated the most ARE NOW SITTING ON LOADS OF INVESTORS + HARDWORKING END USERS DOWNPAYMENTs.

Funny how they announce share buybacks, then watch to see if its changes course, then after couple of weeks of further losses, change thier decision...once again, decieving the investors.....

 

[Sally1980]

Dear Fran,

I blieve, Useless is the comment that you can not explain.

All the best,

Sally

 

[PropGuy]

1. Developers for selling off plan at enormous mark up.
2. Developers for advertising heavily overseas and attracting innocent people to sink the money in the bush
3. The government for letting the supply to take over the demand, not regulating the business and stop issuing visas
4. The agents for trying to screw up the investors at any cost.
5. RERA for protecting the developers instead of the investors
6. The financial crisis - I don’t think has done much damage as the above points

There are many parties to blame, but i think main one to blame that you didn't mention are the mortgage lenders. Lenders changed their requirements and people who were expecting 90% to 80% finance are stuck with payments that they can't pay.

 

[financier888]

Blame Game

There are many parties to blame, but i think main one to blame that you didn't mention are the mortgage lenders. Lenders changed their requirements and people who were expecting 90% to 80% finance are stuck with payments that they can't pay.

For the last several years, the Dubai market has been driven by speculators that we are seing now, constitutes about 70% + of the market and in the last few years, speculators have made millions of dirhams... Now, the market has turned, as they ALL inevitably do and I think there is too much time being spent at 'pointing the finger' - if you are a speculator, there are risks - that is the chance you took. I havent head of anyone being 'forced' to purchase.... it was your choice...

Insofar as the banks go - buying real estate with more than 80% financing - is highly leveraged - the banks were at fault at loaning at such high loan to value ratios... so of course, at above 80% the rents are unlikley to service the debt unless the loan is based on an OP 2006....

The real blame? or cause? Human greed and lack of oversight in the US Institutions - that has led to the loss of TRILLIONS of dollars in the global cash flow. In a vertible 'blink of an eye' - literally, trillions of dollars have been wiped out and there is more to come. (incidentally, I am an American, from the finance community and sorry to have made this statement, but the facts are the facts...)

The banks in this region are far more solid and in better shape than most around the globe.... Naturally, the banks have to protect their position in a declining market.. But in truth - most of the sales here have been off plan and as such - owner financed! if you can qualify for a mortgage - you will get one... (I had two banks contact me in the last week alone soliciting me for a mortgage loan!)

I respectfully suggest, rather than trying to 'point' a finger of blame for circumstances created 8,000 miles away - take a constructive look forward and see how you will position yourself going forward and be thankfull you werent holding stcoks like Meryl or Lehman Bros...

 

[Wannaberich]

I blame you, because it seams you have nothing better to do, but sit in front of your PC and type negative posts, dragging down everything and every one.

More over, I am suspecting that some one is paying you to poison the virtual world by creating a `Vicious Circle on Downside’.

Get a girlfriend, or if you can't, go get drunk........find a way to break the vicious circle and move ahead!

I just wet myself laughing !

 

[PropGuy]

Insofar as the banks go - buying real estate with more than 80% financing - is highly leveraged - the banks were at fault at loaning at such high loan to value ratios... so of course, at above 80% the rents are unlikley to service the debt unless the loan is based on an OP 2006....

80% LTV is considered very safe loan in the US, still even with such downturn, lenders in US are offering 90% finance with 6.25% variable interest with employed borrower. And they are considering this as a safe loan (because lenders have long-term out look). In Dubai even at boom time lenders only offer 90% with 8.25% variable interest rate with employed borrower.

I mentioned this to a banker, he said UAE is emerging economy and most real estate are under construction which makes the risk higher so LTV and interest are higher. These are crappy arguments, some developments are very safe and lenders won't lose money, still they are not even giving here 90% finance at 9.25% interest to an employed borrower.

When lenders stop lending over prices going down then it becomes self-fulfilling prophecy because lenders kill the demand prices start to go down.

Market will improve if US$ goes down, but that would be a bad way for prices to reverse. Imo,
(1) Lenders should start lending at more reasonable rates and LTVs for secure projects.
(2) Cost of raw materials has fallen considerably, developers should hedge now on raw materials and pass on the savings on construction to buyers.
(3) Govt should allow visa on properties that were bought due to do visa ads. They can block visa on new properties that are issued after law change or clarification or whatever anybody wants call it.

That will create long term demand and confidence. International hedge funds can buy the properties, and they don't care about these things except construction, but they also dump the assets very quickly when their hedge value gets negative and bring large fluctuations in market. People depending on the local markets suffer this way.

Problem here is not just the speculators, but financial institutions also look at short term profits. I think only Sheik Mohammad thinks long-term in this region.

 

[georgihh]

I just wet myself laughing !

Wet or dry you are also losing money, SO Is going for 700 DHS per sqft (ready).
More pictures you make more money you lose, just dry yourself and face the reality.