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Hi guys

I have been here forever and am considering buying a villa for use and not investment only. I have been considering forever now....when they first came on the market I convinced everybody I knew (and who could afford one) to buy...they did and are thankful today . I thought I could not afford one, in hindsight maybe I could have.

Anyway, I was looking at Palmera in the Arabian Ranches. I do not need to move immediately...but was looking at doing so in 2 years maybe. Now things are more complicated ....I think the risk (although totally new teritory) was limited one...now I have no idea...as I read/get absolutely conflicting reports.

Hi AFG

sorry bout your last post being moved to fight club.

My opinion for what its worth, is i would hold off purchasing at the moment. At present the market is falsely inflated and will remain so whilst demand outstrips supply.

I believe the market cannot sustain this indefinately. The situation in my opinion will change starting early next year as more properties and developments complete and are then pushed back on the market.

There are many speculators/investors that jumped on the bandwagon after the initial investors like myself started it off in 2002. Those who put down deposits in 2004/2005 and are due to complete in 2007/8 (and havent already sold off their options) will have to come up with the balance.

Many of these wanabee investors i believe are going to find themselves in a situation of having to find the balance and complete only to find the market has re-adjusted itself in terms of sale prices.

Then i believe it will be the time for the shrewd investors like myself to jump back on the bandwagon, and sweep up at others losses.

AFG wrote:Hi guys

I have been here forever and am considering buying a villa for use and not investment only. I have been considering forever now....when they first came on the market I convinced everybody I knew (and who could afford one) to buy...they did and are thankful today . I thought I could not afford one, in hindsight maybe I could have.

Anyway, I was looking at Palmera in the Arabian Ranches. I do not need to move immediately...but was looking at doing so in 2 years maybe. Now things are more complicated ....I think the risk (although totally new teritory) was limited one...now I have no idea...as I read/get absolutely conflicting reports.

You can ask in Expat help section or accomodation section, there are ppl knowlegable about real estate prices

Thank you Arnie. Do you think all this applies to villas as well, as villas are lesser in supply. I can not imagine prices dropping to anywhere near when some of the initial projects were launched, what would a pro say. I was thinking more on the lines of current prices slightly dropping or simply stabilising for projects like Al Reem, Palmera, etc.

Hi AFG

As a developer myself, i do not really consider a differential between appts and villa's. In my humble experience, when a market drops it drops across the board.

The % of drop between villa and appartments is unknown, but as i previously posted it is a matter of demand outstripping supply at the moment.

When this turns around, i believe people will go for the cheaper option ie appartments, this will have a knock on effect of development like Spirngs etc, ie high demand will divert and slow up dramactically.

At the end of the day, any property market is subject to the factor of supply v demand.

Also i firmly believe the cost of living index will increase dramatically in Dubai over the next 2/3 years. There is already talk of VAT being introduced in 2007 and as you know the property tax will soon start to take effect. These are further factors that will damage the UAE property market as the country becomes less competative and more expensive in terms of disposable income.

AFG

I have been thinking a lot about this. I can only give you my opinion, but i would wait, i fully intend to purchase more property for long term investment, but i can sleep at night knowing that now is not the right time.

This may come back to haunt me, but i have always followed my instincts. At the moment it is saying NO - Wait.

Prices have already slowed, and if you note from some of the new off plan developments, they are starting to give incentives likes cars and deferred payments. This tells me the developers have cottoned on to the slow down in demand.

A lot of people are predicting a fall property prices, apartments in particular, and JBR if you want an example. I agree with the arguments being put forward about supply and demand, but Dubai does not seem to follow these rules. You only have to take a walk around the developments and see the number of empty properties to see that there is currently more supply than demand, but although prices have slowed, they are not dropping.
The Dubai governement wants to attract 100k new residents per year. If they can achive this goal, demand will surely outstrip supply. But as arnie has already pointed out, they need to put a lid on the cost of living and remember that the number one reason that people move to Dubai is to save money. Without this carrot, they will not attract the numbers that they require.
I beleive that villas are not as susceptable to the drops that may occur with apartments and arabian ranches is the best place to look.
You can currently purchase a ready to move in villa at arabian ranches for a lot more than one that will not be ready for 2 years. My advice to AFG is to buy one that will not be ready until 2 years, during which time it will increase in value to current levels. These prices are being set by the developer and there is no chance that the developer is negotiable on price. You are dealing with people who would rather have a villa sit empty for 6 months than lower the rent by 10%. Call them stupid, but they have the money to do it and don't give a shit what you say.

hi Benwj

I would respectfully slighly disagree with one point if i may.

You say "empty" properties. Lets take for example the Marina. There are not many empty properties because there are no properties available. JBR wont complete until end 2007/early 2007, there are many speculators that have bought multiple properties that will no doubt be dumped back on the market @ completion.

The other issue is that of "completion" itself. There is a huge difference between putting down a deposit and making a % of stage payments and finding the final payment to complete.

I believe as more projects come to completion in serious numbers like JBR, that is the point where the market is likely to collapse, in terms of price

Already there are indicators that the market has slowed down. There are currently developments that are offering "free cars", 50% payment interest free etc etc. These are all signs of a slow in demand, developers know this and thus are giving "incentives" to keep the market bouyant.

I dont believe villa's will remain as static as people think. Yes there will always be a supply and demand for properties that are not the "norm" i agree, but in countries where property markets have existed, the drop or increase is always across the board, and rarely differentiates between property types. I do however agree that there will be a % difference between villas and appartments.

The people sitting on empty properties are fools. Yes they may not give a shit and can afford to keep it empty, but this shows a true lack of experience compared to those like myself that has experience of an established property market.

Hi Arnie,
No need to use respect just because I am new to the forum!
I think that we both agree that there is going to be a flood of apartments on the market over the next 2 years. But I still think that it will only be the srewd investors like yourself who manage to find the bargains where people have overstretched themselves and cannot make the final payment. There will also be developments, Dubai Marina being a good example, that have greater demand than others such as JBR. Bargains will be a lot harder to find here. The rest of the properties will be owned by the fools that refuse to sell/rent them for anything less, and will waut for demand to catch up. This will give an unrealistic impression that the market is not falling. But this is good, because then you can sell your recently aquired property and make a quick profit!
Anyway, back to AFG.
If he/she wants a villa, to live in, that will not be ready for 2 years, then I say, buy now. Because, there will not be a flood of villa's on the market, the premiums are still quite low for some of these villas, and rents are still on the way up. I expect these villas to increase by at least 25% by the time they are ready in 2 years. Sports City is another good place to look AFG.

Thank you guys...I had not read these posts earlier, I think I forgot to click 'notify me when a reply is posted'.

We are probably not going to buy immediately, unless my cousin at Emaar can get me something off-plan - but it seems no villas are coming up that fit my budget.