Looking for people with expertise in purchasing property in Dubai

[aviationluver]

I have some fellow yanks in the states that have heard property prices continue to fall in Dubai. I've heard Real Estate prices have fallen by around 50% before the bubble burst a few years ago.

Is there anyone with expertise in the Dubai Real Estate market? We're thinking of picking up investment property in Dubai. Any information would be helpful.

Hope to hear from you.

[777boyindubai]

My Dear Friend,

Please read what I am going to write VERY carefully indeed. Under no circumstances should you buy property in Dubai. Many, many people have had their fingers and a few other bits badly burned.

1 You can only buy in certain areas.
2. Contracts are virtually NEVER honoured :ugh:
3. People sell properties with no title deeds.
4. Greedy management companies charge exorbitant management fees and don't do the maintenance :{
5. There is no one who will be able to show you a case in law where the courts have forced a developer or maintenance contractor to honour their contract.
6. Even when a development has been cancelled, it is virtually impossible to get back money from Escrow.
7. Poor construction and finishing.
8. A decreasing population....who is going to rent your property?
9. This is not the US or the UK/Europe in terms of regulation. Don't believe you have rights. You don't.
10. No such thing as class action.
11. Prices could well drop another 30%.

I am sure there will be many more comments, here. If you are going ahead, please do your homework!

Good Luck!

[dustyprops]

A very good reply from 777. The only safe place for your money in Dubai, is to keep it out of Dubai.

[Proximity]

Didn't Dubai just have it's first foreclosure...you've got to figure there will be many more to come. What are banks doing with properties that have bad mortgages. There is no disclosure like you'd have in the usa.

[Not from here]

While fully agreeing that many property projects are not good value, my own experience has not been all doom and gloom! My own house is still double the value of what I paid (I did get in early) and I don't have put up with messages from the company telling me I can't swim in the community pool or use the tennis courts. The community charges are reasonable and it would seem the developer listens to the owners as we had a reduction last year. Comparing my property charges to my service charges in London, Dubai's are less. As for investment property, I have 2. 1 is returning a yield of 9.6%, a far better investment than my property in London. The other one is nearing completion but held up due to infrastructure works. Though costing me money at the moment, the developer has been more than honourable and has assisted in reducing the burden to me. The message here is not everything in Dubai is a bad investment but as with any investment, Dubai or any other place in the world, careful research and back-ground checks on who's building your properties, what the rental yields and is there a demand for this type of property, are are vitaly important.

Horror stories of property investment are certainly not exclusive to Dubai!!

[BigGeordie]

What 777boy says is half right, so is what Notfromhere says. For anybody working for Emirates I think you would be mad not to take the money and buy somewhere- if you have a big enough deposit (and we are talking 25 to 30% as a minimum). If you get the right place at the right price Emirates will basically pay your mortgage. After 20 years you have a "free" property, should you decide to stay here that long. If you stay in company accommodation for 20 years at the end of it you have nothing. And you have 20 years of being told who can and can't use the swimming pool/tennis courts, arbitary DEWA caps and the generaly pleasure of dealing with the accmmodation department. Did I mention the occasional forced move, sometimes with only a couple of weeks notice, if they decide they want you to live somewhere else?:ugh:

From an investment point of view, rental yields are still very good if you pick your area carefully. Build quality is less of an issue than some people make out but it does tend to depend on the developer. My service charges actually went down this year- they are cheaper than my property in the UK and I get more for my money (swimming pool- that guests are allowed to use- 24 hour security, daily cleaning of the communal areas and more).

As with any investment, do your homework and listen to both sides of the argument. Prices may have bottomed out, they may go down a bit more. I don't think anybody really knows. The "experts" certainly don't. My golden rule at the moment would be don't buy off plan. You don't need to, there are plenty of good fiinished properties about and completion dates are even more elastic than they used to be. Be wary about buying with a tenant- the rent they are paying from last year may be more than the market rate now and you might not be able to relet at the same price. Finally, watch out for hidden costs like transfer fees, mortgage arrangement fees, separate bills for airconditioning (usually included in the service fee, but not always) and many others.

I've bought and sold a few propeties in Dubai and would be more than happy to do so again.

[woodja51]

The balanced posts are correct - there are as always opportunities and risks.

the best one is the fact that if you do buy to live in then EK will pretty much cover your mortgage and you will end up with something to show for it at the end of your time.

The prices could indeed fall further, but all things being equal I think that the established areas have probably/possibly bottomed.

Lots of hidden traps, costs and generally poking sticks in your eyes to get things done.

Of course you need a relatively high deposit as the lending lvrs are still pretty high so depends how much capital you wish to risk.

And watch the lenders here - the make up their own rules arbitrary interest rates, use blank security cheques and stuff like that which is quite different to what you are used to...

One way to go is to get a mortgage for a small investment ( which is the only way you can get the company allowance now...) and then rent something for your self perhaps.. but this is not practical if you have a large family as you are unlikely to get a decent villa for the allowance given even in the current market if you have a 2+2 or more family.

WJA

[Marooned]

Look in the papers, ask the agents, then property prices are still strong. Of course they would do anything to try and talk the market up because they are stuck with a portfolio of over-priced shacks.

Ask those who are trying to sell and it's a very different story. The prices being asked are fantasy figures and those selling are doing so for much less than those advertised.

Look at the fundamentals: Ask yourself what is Dubai going to be? Where is it going? Tourism? Trade? It doesn't produce anything so is dependent on import - export. It used to be an economy based on property development and high risk speculation... now it has collapsed. There is nothing to replace it. The international economies are in deep trouble too so who and why would anyone want to invest in Dubai especially as they now have to 'regulate' the perviously 'unregulated', one of the attractions to many 'cleaning' money in the past.

Other Gulf states are vying for investment and building viable infrastructures increasing any competition to 'discover' Dubai. Many who have only discovered what a mistake it ever was considering coming here.

Otherwise stay away, it's over.

[Jet II]

I dont think it would be totally wise buying a property simply for investment given the problems previously stated. That said I know several people who are making a decent return by doing just that.

However if you are looking for a place to live then it can still be a profitable exercise. If you want to buy then avoid anything that is off-plan and any property that is not within 6 months of competition. Buying completed properties in relatively completed areas is still a practical proposition - prices are down but in many cases are still above original selling price and good quality properties are selling.

[Marooned]

You can also make a small fortune if you put a larger one into EPI. :mad:

Trying to find people with 'expertise' in purchasing property here is like trying to find a rat snake in a pit of vipers.

[FJCruiser]

Don't try to catch falling knives.....

[saywhat]

I've heard that there was a guy that could pee into a 20 knot wind without getting his feet wet. Now I'm sure it can be done, but I think it's just easier to pee down wind.

[Aurora Borealis]

I feel sorry for a colleague who has a mortgage of $400,000 on his house in Florida and told me he would be lucky to get $200,000 for it.

Talk about feeling stuck!

Why don't you look in your own backyard for real estate value. You guys also had an overblown bubble and a lot of people are unfortunately hurting. Not just in Florida, but Arizona, California and elsewhere.

The good news, at least in the US, things are somewhat regulated. And worse comes to worse you could practice the All American sport of suing someone if something goes wrong.


To want to look for real estate in Dubai is a little naive. Either you're inexperienced in real estate, or a little greedy.

There is no good reason to want to look for an investment of any kind in the Middle East. That's only my opinion.

Good luck

[kit330]

Hey "saywhat" that's hilarious...the best I've heard but very true...:ok:

[bigmountain]

Try a few reputable PROPERTY AGENTS

BETTER HOMES
SHERWOODS PROPERTY
LANDMARK REAL ESTATE
AS A STARTNG POINT
DO A GOOGLE SEARCH OR GO TO DUBIZZLE.COM

BM

[777boyindubai]

Dubai may seize properties from defaulters - The National Newspaper (http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100425/NATIONAL/704249824/1010)

[Marooned]

He said that, according to his contract, he had the right to cancel the contract and receive a refund if the property was late.

Contracts, as many EK employees will tell you, are worthless here.

Many bought off plan with assurances of completion dates from developers or penalties if dates were not met. Now that they have defaulted these 'assurances' have also turned out to be worthless. Properties are not being completed and you are still required to pay for them.

These 'auctions' to sell repossessed properties will be government run and will wipe out the initial investors money and the resale values will go straight to the developers and the government. Win, win for the cash strapped rulers of Dubai Inc.

This may represent the investment opportunity the threads author is looking for and the slick marketing teams are ready to take your money but the fundamentals remain the same: Over supply, under demand and why Dubai?

[LongExcursion]

Aviationluver - you're based in NYC, right?! Surely if your home market has taught you anything it's that investing in property is a risky enough proposition in your own backyard, let alone half way across the globe in an unregulated, ethnocentric, legally and culturally disparate place like Dubai? Even if you do managed to navigate those issues and find yourself a "bargain" (which unless you're planning to stop-over and spend a few weeks doing your own legwork, will require pinpointing it by proxy), you've then got to consider the possibility that although the AED may be pegged with the USD right now, there's more and more risk that it wont be. So you've then got the added risk that by the time u come to sell it any capital increase might have been crapped on by an exchange loss.
If you were living here in Dubai, then its a far different proposition for many of the reasons listed above. You buy here to take advantage of EK's package which makes owning versus renting make sense. Two mates of mine also living here got tempted to speculate and invest in what appeared to be a license to print money (The Palms). Invest in haste, regret at leisure. Take a leaf out of Nakheel's book.