Dubai property prices

[jangler909]

After reading a lot of posts people complaining of high living costs at Dubai, I saw elsewhere a link that caused me a lot of confusion. Why are the flats so cheap (you won't get a **** for 50-60.000£ in Finland) but rents so awfully high? If one buys a flat, naturally there must be some kind of monthly payments too - at what level are they approximately?

Or am I just missing something? :) Here's the link:

http://www.findaproperty.com/regi0102.html

[plovdiv]

Figures shown on that link are at best misleading and at worst rubbish.

As a guideline a completed studio presently would cost around £95,000 and would rent for around £700/month.

In the near future there is going to be a major surplus of apartments in Dubai as many projects reach completion with an inevitable slide in rental and residual values.

There are less villas available and these may be marginally protected from a slump however many people presently living in villas are likely to move and take advantage of lowering prices of apartments. Many of the apartments will be great places to live such as the Marina when it emerges from being a building site.

Unlikely to be a property crash but expect some settling of values and returns over the next three years.

[StarWinder]

Drive along SZR and look at the literally thousands of apartments going up all over - some of them with extremely slow progress. I wonder how many have been sold?

A recent report in the local papers highlighted that DAMAC (a major developer - used to be an oil field catering company) are at least 12 months behind with one landmark development - leaving investors without their promised rental incomce. Oh, and they also conveniently seemed to have forgotten about the standards promised for kitchens and bathrooms. Latter not even RAK Ceramics fittings, but from an outfit in Oman.

There is no way that the current price levels can be sustained, given the mis-match between property prices and local wage levels. Maybe no outright crash - but certainly a steep correction coming our way. My bet is to wait for a year or so and check out the secondary market.

Better value to be found in new projects in Ajman and RAK, unless travel to and from work in Dubai is a major issue.

[Muttley Crew]

DAMAC...are at least 12 months behind with one landmark development - leaving investors without their promised rental income. Yes all very sad but with landlords kicking tenants out in order to re-lease the property outside the 15% increase per year restriction, it's a little hard to feel sorry for the ****s!!

Hopefully this woeful construction situation will deal out a financial @rsekicking to these types.

By the way, if they are all 50 storeys+, then why are they called "flats"??

[StarWinder]

Muttley Crew:

I share your distain for the typical local landlord, however, the properties that DAMAC have fallen behind with were sold mainly to overseas-based individual investors seeking a return on what is often their retirement captial.:ouch:

(I am not a buyer of any of these properties, by the way).:ok:

[fatigueflyer]

The crash is on the way....very soon. Hard to convince the leaders of Dubai that a crash will happen. Very typical of the pit...if you don't mention it, it won't happen. Wake up and smell the pollution, construction and the stench of greed!!!! :yuk:

[Muttley Crew]

Yeah I know SW. And villa values aren't subject to quite the same market forces as the 10s of 1000s of apartments are so it looks like they get away with it.

As for the Crash, who at the top will really care? The apartments will have already been sold to foreign buyers as well as regionals (who cares) and "lesser" locals. Those holding the purse strings will have already cashed in their chips.

Great deal if you're in at the top, wouldn't mind some of that action myself. But I'd hate to be a Saudi stuck with two floors of some apartment building whose view has been blocked by an ugly, half-finished concrete blight. Two floors that he planned to offload at exorbitantly-inflated re-sale prices....:p

Or a European investor who fell for the hype.

[fractional]

Shifting sands... There is no substantiated evidence to indicate the property will prosper. In due course, a crash will happen and rents will come down fast. Apartments first followed by villas at slower pace.
Who will benefit? I hope the common expat citizen. The same will apply in AUH in 10 years when all those projects are completed. As someone said here already Hard to convince the leaders of Dubai that a crash will happen. Very typical of the pit...
It's a nightmare for those (tennants) having to deal with these cases in order to keep healthy bills at the end of the day.

[Wiley]

A mate in banking in the Sandpit told me about 6 weeks ago that the smart money boys in Abu Dhabi are standing by in the wings waiting for "the correction", which they expect to be quite large, when they plan to swoop and "buy Dubai" (his term, not mine).

If he turns out to be right, it would seem that quite a few people will be left with 2 million Dirham mortgages on properties that won't, (in the short term anyway), be worth anywhere near that amount.

Shades of London in the early 90's.

[fractional]

Another additional newspaper article.
http://archive.gulfnews.com/nation/Housing_and_Property/10053969.html

[neilb767]

Indications of an impending propety Crash as i see it.

First off the UAE stock markets have had a tough time lately.... How many out there will need to liquidate hard assets to cover their margins.... Seem to be a common early warning around the world.

Second, when apartment builders start calling you , and offering a free jaguar with the purchase of an apartment...its kind of obvious is it not?

And now, i see that DAMAC, will give you a free Studio apt, if you make a selected purchase..heck, now there are giving them away...

Need i say more..."look out below"...

[bravehart]

I wouldnt suggest any1 to buy an appartment/villa in Dubai, aswat we see is the artificial rise in rents as the Govt wants people to invest their hard earned money and buy the flats/apptts. Recently almost 400 projects were cancelled/shelved on the orders of the Govt. as they fear too much surplus apptts will lower the prices. These price increase in rents which you see now are ARTIFICIAL, wait for another 2 years and you will see the prices in Dubai lowering to prices in 90's.......there are almost 15000 appts being built and all of them are being bought by INVESTORS (just 5% are the real buyers) so you can imagine whats in store.....

[Cyberbird]

Well - fact is, that my HSBC Bank Manager keeps calling me every fortnight now, and tries desperately to sell me some appartments "at new bilding sites - soon to be finished" at repeatedly LOWER prices!
Firstly, the 2 bd.room appartment was up 4 sale for 850 thsd. Dhm -but nobody wanted it, then 810 - and now i would get it for 750 something - 95 % financing (!!) negotiable !! How bad is that !?

the appartment prices are obviously already on the downturn, as my colleagues confirm, who can't sell their investments at the Dubai Marina with profit anymore (bought right at the peak ...:{ , and are now stuck with their investments and have to cover the installments !

Ergo: The bubble will probably not burst rightaway - but it's definitively starting deflating by now - significantly - definitively at the appartments, whereas god located villas might be able to keep up their prices (NOT value!!) slightly longer - due to less oversupply there ... :ok:
wait another 1-2 years, and You wull see the prices coming back some 30-40% for sure ;) :ok:

[pzu]

Mon 24 July- UK TV (ITV) 2000 BST
TONIGHT with Trevor McDonald - scheduled first of two programmes on 'Brits buying abroad' tonight's subject DUBAI :oh:
Could be interesting :suspect: :=
PZU - Out of Africa

[fractional]

Bravehart, I think it's a good and sensible measure to downsize, however a bit too late in my humble opinion.
The local government has to realise that they have to consider the investing expatriate force or others as equals (with or without the local citizenship) and NOT as Guests (Guests???). I treat my guests WELL... The genuine Emirati born population is under 30% of the total resident UAE population. If they really want a genuine cosmopolitan full time resident society, a lot has to be given in a orderly manner. Will it ever happen? I don't think so, at least not in the next 50 years... There is still a lot of oil and gas to be sold.
This way investors, the guys who are really planning to buy and live in the purchased properties, will feel AT HOME, or then continue to invest heavily in diversified trades in order to attract a good 2 or 3 milion people workforce (with or without families) that one way or the other will either get free housing or competitive allowances in order to rent these properties.
I believe anything else is just a mirage in quick shifting desert sands. How genuine and natural is the life here? Only the locals on the coast line, mountain or inland untouched villages feel the natural and undisturbed with their day to day way of life. Obviously, they wished they had a little bit more of cash in their pockets.

[ruserious]

The genuine Emirati born population is under 30% of the total resident UAE population Not sure how accurate those figures are, interesting article here, http://www.aqoul.com/archives/2006/05/census_and_sens.php
EK has around 7% UAE National pilots

[L1011]

An old English chap named Francis Smoked-Beef said that years ago. The UAE government seems to believe it.

The actual Emirati-Expat ratio in Dubai is a closely held figure. A National friend of mine who is heavily into real-estate reckons the ratio is declining rapidly and (assuming all the accommodation being built will be filled by an influx of fresh expats) will reach about a 95/5% ratio by 2020.

Hence the moves to grant 'citizenship' to an increasing number of long-term residents. Also the push for 'e-government' and automated services, despite the high under-employment among Emiratis.

Interesting times.

[Rabbitwear]

Just imagine ,a crazy driver runs up your butt on the SZR and puts his head through the windscreen because seat belt was not on.
Your an expat and you dont belong there so it was your fault. And wow youve got a 5 million DHS villa on the palm the lawyers are gonna get that off you and every other asset in the UAE to give tio the grieving family that already has about 10 million in the bank.
You never really own anything here and it could so easily be taken from you.
Also the prices of rent may keep going up as expats get pissed off and leave more desperates will give it a try. For a lot of people DXB is not a bad place compared to there home country.
Personally you are better investing outside in a westernised country for smaller and safer returns.

[fractional]

Another piece of contributing news from a local paper. One of these days they will be :mad:
http://www.gulfnews.com/nation/Housing_and_Property/10054542.html

[captbstard]

Property prices are way above normal in Dubai, likely to be more expensive in Abu Dhabi, but seems like better quality in AUH.
If the airline is paying 100,000 AED towards the rental and this can be used towards mortgage payments then some think it is a good investment, but what happens when you want to leave and have a 5 million dirham mortgage, can you leave with such a large debt and who is responsible for any losses if the market drops?
Now theres a thought.
We will see.