Dubai Forums Dubai Discussions Dubai General Chat

Welcome to the bottom: Housing begins slow rebound

It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

http://news.yahoo.com/s/ap/20090801/ap_ ... ar_outlook

Redkite- Dubai market will soon rebound as well. So stop spreading you pessimistic thoughts all over the place.

Metaphor79 wrote:Redkite- Dubai market will soon rebound as well. So stop spreading you pessimistic thoughts all over the place.

Remember how earlier housing cycle booms and busts have taken place in history.

Its the double dip. First you have residential investment (RI) that bottoms out during a bust. Well clearly that is happening now in the Dubai real estate sector, as they are simply incurring major losses at this point in time. Companies are experiencing quarter losses from 30 to 50 percent YoY. No new investments are granted. Most is currently on hold.

The latest forecast releases say that the RI might pickup again somewhere in 2010. Then you'll see some projects continue that are on hold now.

Real estate prices however will be bottoming out in about 2 to 5 years after the RI bottoms out. This info comes from historical experience in other housing boom/busts from the past.

So, surely a housing recovery will come, but don't expect it to contribute significantly to GDP growth in Dubai. And we all know how large this sector played its part in GDP growth.

First we gonna see a huge consolidation of the three major players in the real estate sector. Their balance sheets look ugly and they will need government assistence to back them up, or fail miserably.
Therefore we have the $20bn fund that has been set up by HH. Sheikh Maktoum to support the key developments in sectors like Transportation, Real Estate, Tourism if I'm not mistaken.

Booms and bust cycles take some time. Its not all good just the next day

I admire you optimism though

Really Metaphor? I got a few concerns, and hopefully you'll address them. Hmmm lets assess the fundamentals:-
If the economy has to indeed rebound than there has to be GDP growth right?

From 2000-2006 GDP grew at around 19.6%. @007-2008 growth was 13%. But then again what would you say real GDP growth was? What estimates would you put on inflation?
Official estimates have put GDP growth at 6% this year.
So based on what do you project growth?
And while your at it do tell me when DP World shares will rise to IPO price.

GDP growth can be spurred by consumer spending or government spending right? Academics will say that you can't factor in government spending in GDP, but let's be realistic.

Government spending is out of the question for now, that should be a safe assumption eh?

Dubai's boom over the last couple of years can largely be attributed to retail, wholesale growth in addition to other factors like increase in FDI etc.
But Consumer spending which is essential for GDP growth is down

Bank lending is down

Repo rates are still high

Take a look at this:-
http://www.centralbank.ae/pdf/BankingIndicators.pdfat
Notice the fall in various key indicators?

Real Estate isn't looking too healthy as well.

Aldar's disclosures state they have not sold any land this quarter. Emaar posted huge losses too.

So tell us Metaphor, where do you see the rebound coming from? Which sector do you foresee heading the next boom? If you plan to say OIL, they do give us a time frame.

My argument in Dubai's favor is that Dubai has an infrastructure unrivaled in the MENA region and I don't see competitors catching up anytime soon. Give it time, the legitimate business with sound business models will survive and lead the way out.
I'm optimistic on Ports and FDI will gradually increase.

So Mr Metaphor aka Nostradamus, on what basis did you foretell the next boom? An apple on the head a la Newton?

RobbyG wrote:

Metaphor79 wrote:Redkite- Dubai market will soon rebound as well. So stop spreading you pessimistic thoughts all over the place.

I admire you optimism though

I’m not an economist or financial analyst. So I’ll make it very simple. Let’s consider the following facts:

Dubai is a growing economy, which still has the potential for a great growth.

Dubai economy hasn’t matured yet, its growth was ‘interrupted’ by external factors, so it’s not busted or terminated and will be back on track sooner than mature economies. Here I’m quoting Charles O Prince III, former chairman and CEO of Citigroup, “My general view is that Dubai is quite a remarkable place and things that are being done there are very, very interesting and generally very positive. The recent liquidity problems have disrupted the plans but I think it's more likely that Dubai will [soon] be back on course. It'll depend on how liquidity comes back but we've seen that as debt markets have recovered, and as liquidity comes back and those doors crack open, my guess is that Dubai will be more likely to recover and get back on track.” http://www.business24-7.ae/Articles/200 ... 8da32.aspx


Dubai is still a safe haven for investors not only from Europe and The States, but also for those from GCC countries & other Arabs countries, Iran, China and India, you can’t underestimate the millions those investors pour in Dubai. Even the region’s corrupt politicians invest in Dubai ( Not money laundry, cuz nobody will question them in their home countries ). Those investors still buy properties in Dubai, as we speak, but at 2003 and 2004 rates, which are still relatively high and the units are overpriced which means the developers and investors are getting returns on their investments.

The big projects in Dubai (such as Burj Dubai, Business bay, Palms Jabel Ali and Deira, , Dubai sports city, Al Maktoom airport, Jabel Ali port..etc) will contribute to Dubai recovery. Units in these projects were sold, and re-sold and are still being sold. Now, that will help the real estate sector recover slowly.

The service sector has hugely contributed and will still contribute to Dubai’s GDP growth. Take free zones as example ( DMC, DIC, Silicon Oasis, DHCC, Techno Park…etc) and import and re-export services.

I agree with you, the recovery won’t happen overnight. It will take many months and will happen slowly.

Keep in mind the fact that Dubai economy is not really a free one. Dubai is rather a big family business owned by Al Maktoom Family and the CEO is Shaikh Mohammad who will do the impossible to get back on track. Last public try was Dubai bid for 2020 Olympics, can you imagine the boom such an even can bring to Dubai?

Eventually, every boom will have an end or I should say a peak, where the market stabilizes rather than, as you think, bottoms out. Dubai market is sill far from the end of its boom. It still has a lot to go through and even more to give.

And yes I’m very optimistic . I think every body in Dubai should feel the same.

Bottom line: Dubai was hit hard by the financial crisis, but it’s still on its feet and will make a strong comeback.

Misery Called Life wrote:Really Metaphor? I got a few concerns, and hopefully you'll address them. Hmmm lets assess the fundamentals:-
If the economy has to indeed rebound than there has to be GDP growth right?

From 2000-2006 GDP grew at around 19.6%. @007-2008 growth was 13%. But then again what would you say real GDP growth was? What estimates would you put on inflation?
Official estimates have put GDP growth at 6% this year.
So based on what do you project growth?
And while your at it do tell me when DP World shares will rise to IPO price.

Good job! You’ve done your homework very well.

You see, I have ‘indirectly’ taught you a lot.

Your next lesson: I say the Earth is round. What say you? Flat?

Take this as a brotherly advice, your extremely defensive and competitive attitude can harm your career (yet to take off, right?)

I am sure Dubai will rebound.

What makes me skeptical is that the exact people who were predicting Dubai was never going to be affected by recession are the same ones predicting a recovery.
I remember how vehemently, even in Sept 08, people (mostly real estate agents) were claiming:

1) Dubai is "different"
2) Dubai's rulers will never "allow" recession to hit


Yet, Dubai got hit, so recovery will come, but gradually...

BlackburnRovers wrote:I am sure Dubai will rebound.

What makes me skeptical is that the exact people who were predicting Dubai was never going to be affected by recession are the same ones predicting a recovery.
I remember how vehemently, even in Sept 08, people (mostly real estate agents) were claiming:

1) Dubai is "different"
2) Dubai's rulers will never "allow" recession to hit


Yet, Dubai got hit, so recovery will come, but gradually...

You have to remember that governments are always flaunting with numbers, so don't expect a politician to be straight up with you. They'll tell you anything to get reelected. Well most of them do, or compromise eventually)

If you look at the facts then you'll see a more dire picture in the short term which translates in job losses and tightening of investments which will limit GDP growth.

The optimistic long term picture of Dubai is not comprimised in my view. The entire Gulf region is a growth market aswell as its back land, China and India. It will come back faster than Europe or the US in my opinion.

Problem for Dubai might be the huge debt load it carries. I quote:

It's mere speculation at this point, but according to SJS Markets, a Swiss brokerage, the new law could even cause Dubai's government-owned companies to sell assets in order to pay down debt and reduce its overall borrowings. Says SJS in a research note:

The new law if enacted could limit Dubai's debt financed growth as the second largest emirate in the UAE has debt load of ~$70 bn while its GDP is ~$55 bn. However Dubai's assets are estimated at $1.3 trillion and we feel the government could sell assets to pay down debt."

The problem for Dubai is its huge dependance on foreign workers. Since they have no chance of gaining citizenship they will have to leave Dubai in case they lose their jobs. Hence the outflow of expatriates back to their home countries.

As most of you know, 20 percent of 1.5 million residents in Dubai are native Emirati's. What do you think happens to the GDP when expatriates don't come back eventually as they now saw what effect a massive lay off means for them under its current Sharia law system?

If more companies have to lay off workers, the picture could get dire. I don't think it will happen, but some economist say this downturn gets a second leg in the end of this year (led by US markets).
Lets just not hope that 20 percent of 1.5 million people have to bear the burden of Dubai Inc.

Fortunately, the future looks promising after 'The Great recession' as its called in the future. A bit of optimism is good for business.

Too much optimism creates malinvestment. Only firm recessions like today will restore the balance in economies that embrace it like Dubai does. It doesn't bail out things like in America. It merely stimulates key developments and that is a good thing for its future growth.

Metaphor79 wrote:Eventually, every boom will have an end or I should say a peak, where the market stabilizes rather than, as you think, bottoms out. Dubai market is sill far from the end of its boom. It still has a lot to go through and even more to give.

And yes I’m very optimistic . I think every body in Dubai should feel the same.

Bottom line: Dubai was hit hard by the financial crisis, but it’s still on its feet and will make a strong comeback.

HA! Why beat round the bush? Answer the questions posed directly to you.

First be quantitative. Don't generalize that's the first sign that you haven't a clue as to what ur talking about?
The various projects that you stated? Do you know at what debt they were built on? Can you say exactly when and how they will lead a recovery. You see many great projects currently exist here, but that didn't avert a financial crisis now did it?
Secondly there is stringent competition from within the region as well. DIFC competes with Bahrain and the QFC. So FDI is bound to get diluted.
Your talking bout the Olympics. Yea it's a fine event. Which they have yet to bid for, and secondly it's in 2020. Besides Qatar( who lost the 2016 bid) and Hungary will also be bidding to host the games. So let's wait and watch before we jump to conclusions. Besides in terms of additional investment for the games? How much more scope for further investment is there? Besides think of the competition from within the region for FDI...

Palms all exist. SO does the crisis. So what's ur point? Are you implying that their mere existance will make everything right?

You say real estate developers are getting returns on their investments? You are mistaken. Banks are seizing properties, the biggest names are suffering losses and the smaller players are literally being wiped out.

Word of advice, dude don't talk bout stuff you know nothing about.
As far as my career is concerned, you need not bother. For my young age I've seen and done more than you can even imagine.

Off course even an illiterate can tell you that Dubai will eventually recover. It has to! It's indeed a fine country in it's nascent stages. The recovery will be there, but investors, expats need to know more. Like when, how much more pain is on the anvil, those are the more direct questions, which only those who KNOW their stuff should talk about. If your so optimistic I would presume ur busy investing your money in Real Estate, stocks eh? Do give us a few tips.

In your initial post to RK you stated that the economy will soon rebound. At least now you've come to admission that it will take time, and will be determined by events and actions beyond UAE's borders.

And I'd rather be a realist as opposed to optimistic or pessimistic.
The situation may not be as bleak as the naysayers may excoriate, but in the absence of proper data, analysis is quite tough. Wouldn't you agree?

But you did make a valid point about corrupt politicos in Pakistan, India and elsewhere in the subcontinent, who would love to invest their ill gotten gains here. Rogues they indeed are!

Metaphor79 wrote:

Misery Called Life wrote:Really Metaphor? I got a few concerns, and hopefully you'll address them. Hmmm lets assess the fundamentals:-
If the economy has to indeed rebound than there has to be GDP growth right?

From 2000-2006 GDP grew at around 19.6%. @007-2008 growth was 13%. But then again what would you say real GDP growth was? What estimates would you put on inflation?
Official estimates have put GDP growth at 6% this year.
So based on what do you project growth?
And while your at it do tell me when DP World shares will rise to IPO price.

Good job! You’ve done your homework very well.

You see, I have ‘indirectly’ taught you a lot.

Your next lesson: I say the Earth is round. What say you? Flat?

Take this as a brotherly advice, your extremely defensive and competitive attitude can harm your career (yet to take off, right?)

Cut the cr@p! It's pretty evident you have nothing to contribute to the subject at hand.
And no one asked you for your cr@ppy brotherly advice. Save it!

BlackburnRovers wrote:I am sure Dubai will rebound.

What makes me skeptical is that the exact people who were predicting Dubai was never going to be affected by recession are the same ones predicting a recovery.
I remember how vehemently, even in Sept 08, people (mostly real estate agents) were claiming:

1) Dubai is "different"
2) Dubai's rulers will never "allow" recession to hit


Yet, Dubai got hit, so recovery will come, but gradually...

Yaa I remember those cronies.
Late 2008 I think Merry Lynch was the first to submit a report warning of the impending fall in prices. It was hilarious to see all these self proclaimed experts, mostly from India and other expatriate countries, trashing the report as baseless and blah blah blah.
Would love to see the look on their faces now!

Listen Misery Called Life, you're a f@ckin stupid pedantic Paki sh!t. Talking too much doesn't change what you are nor your malicious nature.

Now, Shut up and read, stop banging the wall and pretending to know something. D@mn, that's a very sick personality.

http://www.business24-7.ae/Articles/200 ... 3bf77.aspx

If Charles O Prince wasn't enough for you, I hope Dr. Nasser Saidi will convince you a little. Read and learn, stop cr@ppy baseless arguments.

Metaphor79 wrote:Listen Misery Called Life, you're a f@ckin stupid pedantic Paki sh!t. Talking too much doesn't change what you are nor your malicious nature.

Now, Shut up and read, stop banging the wall and pretending to know something. D@mn, that's a very sick personality.

http://www.business24-7.ae/Articles/200 ... 3bf77.aspx

If Charles O Prince wasn't enough for you, I hope Dr. Nasser Saidi will convince you a little. Read and learn, stop cr@ppy baseless arguments.

You talk about us being arrogant, but you think you got it all figured out.

I know MCL has more valid points to make then you, especially since he's working on his CFA license.

What 'million dollar Bobo' might you be?
I haven't seen sh@t from you Metaboy....just talk. Nothing more.

MCL earned his respect. I think you failed miserably once again. A bit of courtesy might suit you also I see. We already determined your lack of communication skills and lack of judgemental skills, whats next on the list?

Valid points??? Any stupid fella can google some figures and statistics and past them here. So it's a matter of posting what you think supported by sources, rather than copying and pasting stuff and claiming its your opinion.

And who are you exactly to determine anything?? Have a look at yourself, dude.

Metaphor79 wrote:Valid points??? Any stupid fella can google some figures and statistics and past them here. So it's a matter of posting what you think supported by sources, rather than copying and pasting stuff and claiming its your opinion.

And who are you exactly to determine anything?? Have a look at yourself, dude.

I don't sprockle and paste like you. I actually have the brains to establish a bigger picture with arguments and conclusions.

Go do your 'million dollar deals' sonny. Make yourself useful as you think you are obviously too big for us...

RobbyG, it's not about you, so stay out of it, far away indeed.

Metaphor79 wrote:Valid points??? Any stupid fella can google some figures and statistics and past them here. So it's a matter of posting what you think supported by sources, rather than copying and pasting stuff and claiming its your opinion.

That does sound a lot like what you've been doing! Self reflection eh?

Metaphor79 wrote:Listen Misery Called Life, you're a f@ckin stupid pedantic Paki sh!t. Talking too much doesn't change what you are nor your malicious nature.

Now, Shut up and read, stop banging the wall and pretending to know something. D@mn, that's a very sick personality.

http://www.business24-7.ae/Articles/200 ... 3bf77.aspx

If Charles O Prince wasn't enough for you, I hope Dr. Nasser Saidi will convince you a little. Read and learn, stop cr@ppy baseless arguments.

Ha Racial undertones? You show us a bit of your persona everyday. And in one word, ur quite a Hypocrite!

You linked an article. Pls tell me exactly what does the article convey? If based on such articles you reinforce ur optimism then it must be said that u are indeed a joke!

@ Misery Called Life

Dude, you're rotten inside, and you know it d@mn well.

Metaphor79 wrote:Listen Misery Called Life, you're a f@ckin stupid pedantic Paki sh!t. Talking too much doesn't change what you are nor your malicious nature.

Now, Shut up and read, stop banging the wall and pretending to know something. D@mn, that's a very sick personality.

http://www.business24-7.ae/Articles/200 ... 3bf77.aspx

If Charles O Prince wasn't enough for you, I hope Dr. Nasser Saidi will convince you a little. Read and learn, stop cr@ppy baseless arguments.

calm down mate! u started a discussion..put across ur view point..
someone disagrees...in this case MCL.. so putting across a countr view..
so take it n try to prove ur point of view thro a healthy discussion...

if you can not take a counter argument, then don't even start the discussion in first place..

Metaphor79 wrote:Welcome to the bottom: Housing begins slow rebound

It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

http://news.yahoo.com/s/ap/20090801/ap_ ... ar_outlook

To be frank I haven't seen a strong connection between Real Estate markets in Alaska and Dubai.

Two years ago one my greedy acquaintance bought a sandbox near Emirates road and was waiting for a big profit as the market in Dubai was soaring.

At the same there were the sub-prime crisis in the U.S.A.

Two years passed and he has the same sandbox but with near zero value now. So I don't see any sign of recovery.

Dubai depends on external trade and services to a large extent. So it is certainly not recession proof.
Government spending in the form of the Metro or other projects certainly can boost growth and GDP. (That was show in the early 30s in the US and repeatedly later in other economies.)
In my opinion a lot depends on the world economies.
No economy is an island, intire of itselfe,
Every modern economy is a piece of the continent a part of the world.

Dubai will be the first to rebound in region

"Despite the fact that 30 per cent of Moody's corporate issuers in the GCC are on negative outlook watch, a majority of them in Dubai, the agency believes the emirate is the best-placed economy in the region to come out of the crisis once things improve on a global level.

"Dubai has been the most dynamic economy in the region, and is likely to be the first to rebound once global markets recover," Philipp Lotter, Senior Vice-President, Moody's Investors Service in Dubai, told Emirates Business."

http://www.business24-7.ae/Articles/200 ... c9c84.aspx

Metaphor79 wrote:@ Misery Called Life

Dude, you're rotten inside, and you know it d@mn well.

Rotten inside...?? You obviously sniff too much a$$es all day, Methapill boy.

What happened MCL, were you too eager with the morning eggs again?

Rob, some guy laid an egg, but it's obviously not the student.

Red Chief wrote:Rob, some guy laid an egg, but it's obviously not the student.

I just put on a clean set of knickers... honestly awful Ivan It wazn't me