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Alex1111 · Mar 09, 2008

Ebonics are u stupid?When I say past I mean there will come a time,in around 5 years maybe when the majority of roads and bridges will
be completed.the metro will also be finished hopefully.Obviously there will still be some road construction going on but congestion should hopefully be greatly reduced.
Ian is right regards you can still do well with Dubai property if you ride out the predicted levelling off with prices and price corrections.It cant just keep going up of course.Buy now,and in around 6-8 years maybe prices will have calmed down and instead of rising 10/20/30per cent per year etc it will be down to single figures and those who buy now will have done well.
Dont forget Dubais prices are still way down on other cities and if all the
amazing
projects get completed it will be a city that will be an absolute magnet for people to move to.

shafique · Mar 09, 2008

Alex1111 wrote:Ebonics are u stupid?

A bit harsh?

Cheers,
Shafique

ebonics · Mar 09, 2008

Alex1111 wrote:Ebonics are u stupid?When I say past I mean there will come a time,in around 5 years maybe when the majority of roads and bridges will
be completed.the metro will also be finished hopefully.Obviously there will still be some road construction going on but congestion should hopefully be greatly reduced.
Ian is right regards you can still do well with Dubai property if you ride out the predicted levelling off with prices and price corrections.It cant just keep going up of course.Buy now,and in around 6-8 years maybe prices will have calmed down and instead of rising 10/20/30per cent per year etc it will be down to single figures and those who buy now will have done well.
Dont forget Dubais prices are still way down on other cities and if all the
amazing
projects get completed it will be a city that will be an absolute magnet for people to move to.

am i stupid?

how about you bring a pen and paper and start doing the maths of 300,000 per annum coming in, with the rate of "increased" infrastructure...

mate if you're going to throw insults, at least know what you're talking about, the moron here is you subscribing to such rubbish propaganda, when the place around you speaks for itself. they can finish all the infrastructure that they want to finish, the existing roads arent changing, they're not going to levitate buildings to make roads larger, the roads arent sustaining as it is. and 300,000 people a year are flowing in... am i stupid? think before you talk my friend.

may your roads expand with heat, chump.

shafique · Mar 09, 2008

ebonics - I agree with your view.

'This time its different' is what I keep hearing... but I'm not convinced yet. Happy to be proved wrong (and I was consistently proved wrong in the UK when I kept saying prices must fall - they only have recently started the downward trend..)

That said, guys are still coming over and paying what us 'old timers' think are crazy prices. A friend of mine just moved into a 3 bed in Springs and paid 210,000 (furnished). The landlord bought the place for 600,000! We have only been here 2 years, and are paying 100k (unfurnished) for the same model house (and the guy before me was paying 70k).

But - there are still loads of houses lying empty, landlords are reportedly holding out for the high rents and not budging.

Cheers,
Shafique

ebonics · Mar 09, 2008

shafique wrote:
But - there are still loads of houses lying empty, landlords are reportedly holding out for the high rents and not budging.

they wont budge, and no one should expect them to budge, but with the increase, and not budging, and no one to occupy - multiply that by x amount of years = the date where it will all fall to the ground.

if you want to buy property, abu dhabi is slowly learning from dubai's mistakes, and other emirates will learn from both abu dhabi and dubai's mistakes and so on and so on... there's no plausable reason why you would buy property priced at what it is now, when 200km down the road things are a fraction of price, better built, with better infrastructure.

benwj · Mar 09, 2008

ebonics wrote:if you want to buy property, abu dhabi is slowly learning from dubai's mistakes, and other emirates will learn from both abu dhabi and dubai's mistakes and so on and so on... there's no plausable reason why you would buy property priced at what it is now, when 200km down the road things are a fraction of price, better built, with better infrastructure.

What do you mean by Dubai's mistakes?
The Dubai real estate market has never missed a beat.
And Abu Dhabi are trying to copy the Dubai model.

admog · Mar 09, 2008

Alex1111 wrote:No but u are

Sticks and stones, sticks and stones.

Just because people do not subscribe to your point of view, which is clearly assisted by propoganda and figures that dont stand up to even the merest glance of scrutiny, throwing direct insults at people just demonstrates your juvenility, along with taking away credibility that any of your points may have.

The future of Dubai is a hotly debated one, demonstrated by the varying views on this particular thread.

Listening to all sides of the arguement and commenting as you see it, is better than reproducing government manipulated figures, as we all know which side of the arguement the government are on.

Just to throw another hat into the ring on that one.
Seeing as Dubai Government restricted the continual use of the visit visa, it was an absolute certainty that all these people working on visit visas have had to change to official reseidence visas, which gives a huge number of 'new' residence visas over a short period of time.

In addition to that, Dubai have widely touted official 'tourist' visitors to Dubai of 5-7 million per year over the last 3 years.
Think of the estimated 250,000 people that were working in Dubai, but actually living here until last autumn on a visit visa - this number effectively swelled yearly tourist figures by 2-3 million, every year. A figure which obviously helped to also demonstrate Dubai's huge 'growth' as a tourist destination.

I am just demonstrating that anyone can produce numbers. But until you look at the value of the figures they mean nothing and can be badly represented.

My personal opinion...?
Every year goes by and the figures continue to defy the drop of gravity that many predict. I think it is easy to underestimate the amount of unfinanced funds in the Dubai market, which could possibly help to hold the market up far longer than sanity or maths would normally justify.

Looking at how long it has taken for over inflated markets in the Uk, US and Spain to slowdown demonstrates just how an overvalued market can continue to overvalue even more, despite all apparent logic.

As for Dubai in 2020, at this stage, we can all really only speculate.
What will get built - what won't - there are a million factors that could influence positively or negatively.

But my final comment is look at how much space Dubai has.
Many comments have been made about Singapore and Hong Kong, but Dubai has SPACE.
When a villa at The Ranches or Green Community costs anything up to 7million with a total mass area plot of upto 10,000sqft, but has THOUSANDS of square kilometres of desert behind it, the maths on long term sustainability of value do seem a 'little' flawed, to say the least.

arniegang · Mar 09, 2008

great post Admog

ebonics · Mar 09, 2008

definatly top post

logic prevails.... dont believe the hype, yo.

^ian^ · Mar 09, 2008

I don't think anyone disputes that there will be a correction, or at least a slowdown... and a medium risk of a crash... this will happen as sure as the sky is blue and dirt doesn't taste too good.

The issue for many is predicting when such a thing will happen, and *when* is a very important timeframe.

But the problem with all kinds of things like this, predicting when is more of a game of chance than a game of skill.

What we know... those of us on the 'other side' so to speak is that the Government has faith enough to develop some pretty bold long term plans. It may be hype, or it may be great vision... who knows, but you can be assured that the controlled system of Dubai won't let it just crash.

Alex1111 · Mar 09, 2008

Sorry Ebonics and Admog,I normally react to sarcasim which both of u came at with first.
Personally I dont believe 100per cent buying in Duabi is a win win win situation.I take as much notice of negative news as I do of positive news.For example,less work visas were issued last year than in 2006.
When I read reports like that I take note, I have too,I've invested in property and I want it to do well.Theres no point whatsoever looking at everything through rose tinted glasses,u have to look at both sides.
Someone made the point that Hong Kong has no-where to build but Dubai has desert,good example.However,the Dubai goverment can help to control prices by refusing planning permission.
We all are entitled to our opinions and no-one but no-one knows what will happen.Even the so-called experts.Personally,like I said,I believe Dubai is a long term investment.Prices will stabilise,even drop,then Dubai will complete the metro and many of the amazing projects and people will come in large numbers I believe.Just my opinion.

shafique · Mar 10, 2008

Alex1111 wrote:Someone made the point that Hong Kong has no-where to build but Dubai has desert,good example.However,the Dubai goverment can help to control prices by refusing planning permission.

I'm pleased to see a healthy debate.

Alex - your point about government restricting supply to keep prices up is a good one. However, does this mean you agree that an over-supply will naturally lead to a crash/correction?

I think those who are of the opinion that prices will fall are pointing to exactly this effect - there will be an over-supply (at least that is my un-expert view when I just see the number of developments and compare it with the numbers entering and earning enough to buy a luxury flat).

Cheers,
Shafique

^ian^ · Mar 10, 2008

shafique wrote:Alex - your point about government restricting supply to keep prices up is a good one.

Except it is false. Nobody is restricting supply, it's not necessary with the very real shortages in raw materials and even labour that is being experienced at the moment.

Do you think the construction companies would be quiet about the government restricting supply? Most already have more work than they can competently handle which is also raising concerns.

shafique · Mar 10, 2008

Ian - I agree. I was just testing the logic - if supply is not restricted after all, then prices will/should fall.

My view is that it is hard to argue that the actual and planned developments in Dubai are an indication of a desire to 'restrict' supply. Ergo - fundamentals will come home to roost.

Cheers,
Shafique

^ian^ · Mar 10, 2008

shafique wrote:Ian - I agree. I was just testing the logic - if supply is not restricted after all, then prices will/should fall.

My view is that it is hard to argue that the actual and planned developments in Dubai are an indication of a desire to 'restrict' supply. Ergo - fundamentals will come home to roost.

Cheers,
Shafique

Natural market conditions are creating their own restriction. Price of course, is reducing the number of potential buyers everyday which is raising viability issues with planned projects.

Resources, animal, vegetable or mineral, are in short supply as well, again forcing the price of construction up and raising the barriers to entry.

Global Economics are pushing up the price of raw materials.

The government hasn't had to delay the launch of a single project yet to restrict supply. On top of that, there are 187 non-government developers in Dubai alone, who so long as they can satisfy section 8, are not regulated by the government.

I wish people would put this conspiracy theory to bed.

MaaaD · Mar 10, 2008

Ian the government can control supply of land, after all all the land is owned by the sheikh/government of the respective emirate. So if Dubai had concerns about oversupply, they can just stop issuing land to the master developers (who in turn resell to the private developers).

i think that was the point being made.

^ian^ · Mar 10, 2008

MaaaD wrote:Ian the government can control supply of land, after all all the land is owned by the sheikh/government of the respective emirate. So if Dubai had concerns about oversupply, they can just stop issuing land to the master developers (who in turn resell to the private developers).

i think that was the point being made.

Yes but they're not currently doing this either. Sure enough, there are 3 developers in control of Land Banks at the moment (Dubai Properties, Tatweer and Nakheel) and these are in-sync with the Zoning Authority for freehold development. FWIW, Emaar have exhausted their own Land Bank.

All 3 still have land available to the 'right' investor.

If and when the need arises for more land, more will become available. This of course, is no different to land and zoning in any other established country, where you can only build certain developments in certain zones.

The bottom line is, land issuance isn't being used as a strict control today. It may be in the future, but I doubt that highly for reasons I will shy away from.

MaaaD · Mar 10, 2008

Here is a well thought out article by Peter Cooper on the Dubai Property market in the medium term and why the prices are gonna continue to rise.

http://www.business24-7.ae/cs/article_s ... ineID=3502

Dubai property still stands tall
By Peter Cooper on Saturday, March 8 , 2008

In Dubai many investors typically focus on no more than the week ahead. But in matters like real estate it is more relevant to look at the long- or at least medium-term when making investments. So how is Dubai property likely to perform three to five years ahead?

The Dubai real estate market is incredibly youthful, just six years old this May, the anniversary of when the then Crown Prince General Sheikh Mohammed bin Rashid Al Maktoum said foreigners could buy property for the first time. His word sufficed until the Dubai Property Law followed three years later.

It has been a remarkable boom ever since, and in early 2008 the Real Estate Regulatory Authority – itself all of seven months old – reported that about 500 developers are active in the Dubai market. How many units are under construction or have been completed is far less certain. The Rera has embarked on a serious accounting exercise to determine the statistical state of the market. It is quite clear that the delivery of new property has lagged a long way behind the numbers promised by over-optimistic developers. Take The Palm Jumeirah, for example: Nakheel initially said it would be fully completed by the end of 2007, and yet even a cursory glance reveals it is less than half finished.

Meanwhile, new residents continue to arrive in Dubai at a phenomenal rate. One recent study suggested 250,000 new arrivals per annum for the next three to four years. Where are they all going to live? Well as you look around Dubai there are hundreds of residential towers going up, and while not everyone will want to live in a mid- to high-end apartment, or be able to afford to, this is where the majority will go. The profile of the typical expatriate resident has shifted towards white-collar professionals.

However, construction projects are running far behind schedule, and physical shortages of men and material make it hard to catch up. The balance between supply and demand is not expected to be met before 2010 at the earliest, according to a convincing study from Meed.

Where does that leave real estate prices? Clearly the rental inflation of recent years is unlikely to go away, except in so far as rents have reached a limit as to what people can realistically pay. There is also upward pressure on capital values from the demand side but yield compression is expected to be the most significant factor in raising real estate prices. What this means is that the rental returns on Dubai property will have to adjust downwards towards the cost of money. In a world where the UAE base rate has just fallen to three per cent – thanks entirely to the dollar-pegged dirham – logic suggests that capital will pursue the higher yields available on Dubai property (7-10 per cent) and drive them down towards the cost of funds (three per cent) or even below that level.

You would not find this sort of four to seven per cent yield gap in any advanced economy, and the market mechanism will ensure that the Dubai real estate market matures and closes this gap. We have already heard that local hedge fund Evolvence plans a $1 billion (Dh3.67bn) fund to take advantage of this anomaly.

With the US heading into a recession, and possibly a nastier one than generally believed, it is likely that interest rates will head lower and could stay low for some years. Imagine what kind of force that would exert on this valuation equation: the upward leverage on the already tight supply of Dubai property would be enormous. So unless the price of oil drops like a stone and the Middle East is plunged into a recession, or America attacks Iran, then the outlook for price growth in Dubai property has to be excellent in the medium term. Some commentators see all the cranes hanging over the skyline and conclude that a crash is imminent. But they don’t understand that Dubai is the most prosperous city in the middle of the world’s fastest growing population. And the very youth of the local property market is also deeply confusing.

The valuation leaps from 2002 have indeed been tremendous. But this was an artificially depressed, closed real estate market before then, and it took some big discounts to get the market rolling to begin with. Those prices were the anomaly, not the prices in the local market today. A recent HSBC survey showed that real estate prices in Abu Dhabi and Dubai were among the lowest for per capita GDP in the world.

The next step is for a leap in values towards those of comparable global cities, and perhaps beyond given the rate of growth in Dubai, which at 13 per cent per annum, has been above China’s for the past five years. But let us end on a note of caution. Property markets do not go up in a straight line for ever, and there will be a correction in Dubai one day, just like anywhere else and those who have bought close to that date will be caught out. But you probably need to look towards the time when a lot of the big projects are finished to begin to see when that might be. It could be 2010 when the Burj Dubai and the $20bn Downtown are finished; that would also be the time when the Dubai Marina is pretty much complete. Or it could be when the first phases of Dubailand are ready in 2011-12.

[/quote]

Alex1111 · Mar 10, 2008

Shafique I do think there will be a price correction or just a rapid decline in price increases.It cant shoot up forever.My personal opinion is that Dubai should have created the infrastructure first and then allowed unit to be built.People dont want to live in a war zone.Units will be completed faster then infrastructure but not enough people will come maybe,because of the traffic and the constrction all around them.So under supply will become oversupply.Then as big improvements are made people will come in many numbers and prices will creep up to normal levels each year.As has been said,the increasing material costs and labour problems will push prices up and maybe cause some developers to give up.
When I see projects like Waterfront and Arabian Canal the word 'oversupply'def comes to mind.Together those two alone will house around 3million.I also wonder who will buy into the developments that will be released around those 2 say in 2/3 years when the Dubai market will have slowed right up.
As for the goverment having no control over prices,if they want to refuse permission to build then they can do whatever they want.

ebonics · Mar 10, 2008

you can buy, it can increase, but good luck selling... or finding buyers at the price you want, when its time to sell..

personally id invest property in my home land, here offers 0 incentive for me to buy... my rent gets paid for me, i dont believe the property market has anything of value to offer me that bricks and mortar back home cannot quadriple double - again all these articles with numbers of 300 thousand, 250 thousand "white collar" workers coming in a year.....

i dont know what they think i am, but i personally dont buy into that crap

exactly like its been said, with dubai's tourism industry, no one i know comes here for tourism purposes, they come here en route to europe, the main attraction is europe, here is a stop over - so why not just have a look... they come, get dissapointed, and move onto europe.... in the meantime that makes the figures inflated into 3 MILLION TOURISTS....

ill question that on its own - ARE YOU DEADLY SERIOUS - what touristic attractions do dubai offer?

a beach (WOW) - in sweltring 50 degrees i may add
a camel (WOWx2)
a big cloud of smog
traffic jams
an indoor ski slope (credit where credit is due here)

then what?

malls malls malls malls?
overpriced hotels with an average price of a beer equating to 10 dollars?
nightlife that ends at 3?
bars infested with filthy prostitutes?

i ask and i ask honestly, what has dubai got to offer a tourist other than a cheap outlet to shop? (thats not becoming so cheap anymore)

no art
no galleries
no museums
no culture
no history
no music
no nightlife
no boozing
and a whole lot of indians and ninja women draped in black from head to toe...

in conclusion, dont get the above data mixed up, like they get their touristic facts mixed up... 3 million stop overs that decide to stay for a day or five a year do not equate to 3 million tourists a year

300,000 expats, i bet you top dollar not even 2% of that is white collar able to invest in these units they speak of.

ebonics · Mar 10, 2008

i should also take this opportunity to mention to HUGE propaganda dubai insights into the world.

when i came the first time here for my first visit when i was negotiating my contract, everyone was like WOW dubai, its the place to be, the mega center of the modern world etc etc..

uptill that point i believed thats how it was too.... till i came and seeing is believing.. the propaganda this place creates is nothing by hype and no game.... its no where near as glorified as it is portreyed in the media, especially overseas.

benwj · Mar 10, 2008

admog wrote:My personal opinion...?
Every year goes by and the figures continue to defy the drop of gravity that many predict. I think it is easy to underestimate the amount of unfinanced funds in the Dubai market, which could possibly help to hold the market up far longer than sanity or maths would normally justify.

It is obvious, due to the large number of vacant properties, that the majority are unfinanced, and this is the reason why the market has not already crashed as many predicated.
These predictions have now been adjusted to 2010-2012, when supply with surely outstrip demand.
But if you are planning on buying after prices drop, why not just buy now while prices are rising, and sell before the crash?
As for 2020... if anyone wants to bet against Dubai, please let me know.
Even if there are any correction in prices during 2012, they will only be temporary if Dubai win.

Alex1111 · Mar 11, 2008

Ebonics I guess Dubai cant be that bad if u choose to live there.
As for tourist attractions , yes theres not enough but give it time.
Rome wasnt built in a day and Dubai will take 10 years.

ebonics · Mar 11, 2008

thats the weakest cop-out of an answer - if they're paying foreigners bucketloads of cash who'd say no?

its not bad - but its not what its portreyed to be to the west. - is my point

i knew this and i still returned, im not here to be a tourist, im here to work.

benwj

"But if you are planning on buying after prices drop, why not just buy now while prices are rising, and sell before the crash? "

that logic makes no sense to me personally knowing the risks coupled with it, if you bought for 2 million and you want to sell at whatever you want to sell at with a considerable profit, finding a buyer at such an over inflated price + your profit is extremely difficult.... and then the crash will come chasing you.

^ian^ · Mar 11, 2008

assuming of course that when the corrections happens that prices will go down. It is quite possible for the market to go through a correction with the prices not moving up, but not moving down.

Stagnantation in the investment market can be just as bad as prices going down.

Alex1111 · Mar 11, 2008

"iknew this and i still returned, im not here to be a tourist, im here to work. "

Big time cop-out ebonics.I'm sure u could work anywhere but u chose Duabi cos u like it there.As a non property owner I can understand why u only see a negative side to the dubai property market.I on the other hand at least see both sides like other people on here.Sometimes in life u have to take risks and buying property is always a risk.Better to live like that than to hide in the corner with the lights out.

ebonics · Mar 11, 2008

mr alex, i had the option of working in dubai, i chose AD - sacrificing any sort of social life i may have had in dubai, because i dont think dubai is livable in its current state.

and how is it a big time cop out, i had a great job in oz, but now i get paid about 4 times as much, i just chose to invest in properties overseas, rather than here. i know my returns in bricks and mortar in a proven healthy real estate market, not succeptable to any sort of crash in the medium term.

Sometimes in life u have to take risks and buying property is always a risk

wrong. its a risk in dubai.

its still not a risk in other emirates, where its a fraction of the price, and even the scummiest of areas in australia dont go down in price.

^ian^ · Mar 11, 2008

ebonics wrote:its still not a risk in other emirates, where its a fraction of the price, and even the scummiest of areas in australia dont go down in price.

Please point me to a development in Dubai that has gone down in price.

ebonics · Mar 11, 2008

^ian^ wrote:
ebonics wrote:its still not a risk in other emirates, where its a fraction of the price, and even the scummiest of areas in australia dont go down in price.

Please point me to a development in Dubai that has gone down in price.

i constructed my argument how that it is inevitable.

its going to happen, just a matter of when. alex labelling his investment as a risk, is admitting so.

^ian^ · Mar 11, 2008

ebonics wrote:
^ian^ wrote:
ebonics wrote:its still not a risk in other emirates, where its a fraction of the price, and even the scummiest of areas in australia dont go down in price.

Please point me to a development in Dubai that has gone down in price.

i constructed my argument how that it is inevitable.

its going to happen, just a matter of when. alex labelling his investment as a risk, is admitting so.

Prices stagnating I think is inevitable.

Prices actually going down? The jury is out on that one.

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