NickTheGreek wrote:Hey Arnie, can i ask what industry do you work in......banking, real estate, hedge funds? As you seem to know what is going on in Dubai i was interested to know.
I remember back in the UK the papers had been saying that house prices are going to fall EVERY year since 2000 and look, it has taken 8 years to hit. Back then EVERYONE was an economist and with each year that past noting happened!
Now I'm not saying that they same will happen here, I know of lenders here that are still offering 90% LTV's....now I'm not an expert in the banking sector but surely if the banks have reached their max lending amounts for the year then the lender would change the LTV's as there is no money left in the pot. Personally I think that the Gov here didn't see Dubai would get this much interest from all types of people. Yes they have had the scams on buildings being sold and the "investment" but which country doesn't at least here people are put in prison for writing a bad cheque!
Now with Sheik Mo adding this cash to the market. Do you really think that he would let his economy fail or would his other Emirate Brothers ! Dont forget the UAE share the oil and gas revenue income and have been doing so for some time. Dubai wanted to have another stream of income apart from the oil and gas, Dubai was the first on the map, a lot of people in the US, UK and Europe think that Dubai is the capital, Now I know that you are going to shout me down about that, but its true, so the other Emirates are all earning from the vision that happened in Dubai all those years ago.Think about it Sheik Mo, wants to have the Emirate that is the tallest this and the biggest that, fair play to him, he wants to have a place that people want to come and see.
Also you always have two types of sellers, the ones that have to sell because they cant make their next payment and the ones that can! Now the little man that flips with 5% yes he is one the that will be effected, (to be honest good, glad to get rid of him) but with all the new RERA laws coming in, this man will go somewhere else. So that leaves us with the one that can make his next payment, he doesn't need to PANIC like the other man, so he will hold onto his property. To be fair I am starting to buy properties at the moment off plan with an islamic mortgage so I cant see the issue, yes you can some good prices with those people that cant make the next payment. I'm not worries about a correction, a drop in prices or what ever you want to call it.
Rental properties are in great demand at the moment, i know of agents that are searching for stock and they have so many people looking.....so for the rental prices to fall is not going to happen. The sales and rental market do not work together, look at the UK house prices are falling and the rental market is going nuts.......dont forget people need to live somewhere! We cant pitch a tent in the desert!! Some people might go back to their home countries........then again some companies pay the rents for their workers!
Also Lloyds, HSBC and Tamweel all increased the LTV's yesterday, so I dont think that they are worried!!
So come on the tell me that I'm wrong and stupid!! Big it on!
No disrespect Nick listening to rumours and actually knowing what the banks are actually doing are 2 different things.
I can tell you as a matter of fact that LLoysTsb (dubai) with effect from Monday are ceasing all appartment mortgages
I will repeat this. WEF from Monday LTSB are ceasing ALL appartment mortgages and......
All villa's pruchases will now carry a 50 % LTV.
Barclays bank are near to the point of pulling out of Dubai.
The current banking system absorbed the 70 billion cash injection within 48 hours. To return to the point of 3 months ago they require a further cash injection of 150 billion AED just to maintain their existing commitments.
With Oil trading at the current low and the predicted further low until January 2009 , the Emirate of Dubai cannot sustain any further injection of cash into the UAE banking system.
As regards 90% LTV's. They are out there, but in reality very few people would be able to meet the criteria to obtain a 90% LTV. The 90% you will find, is a headline rate to attract customers. The reality is that the average LTV by all 20 banks in the UAE that offer mortgages to expats is now 70%.
The UK rental market is not going nuts at all. In part the main force that has driven up rents are the new LHA rates introduced by the DWP and the Local Authorities.
Very few expats in Dubai are earning enough to rent their own appartment - fact. Their housing allowances are far short of the amount required to rent even a one bed appartment in say the Marina Area. With the new law issued by RERA to protect the spiraling rental market the new 2 year rule will tie landlords hands. Coupled with the new 3rd year nominal increase to tennants, the rental market will become static. Add to this the number of properties coming on-line within the next 2 years , it is anticipated the rental market will no doubt follow that of the current property market ie stagnation followed by a downturn.
