Dubai's Palm Jumeirah sees prices fall over 40 pc as crunch moves in
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Dubai's Palm Jumeirah sees prices fall over 40 pc as crunch moves in
Dubai's Palm Jumeirah sees prices fall as crunch moves in
Property prices on the Palm Jumeirah, the island in Dubai that has been dubbed the ‘eighth wonder of the world’, have plummeted by as much as over 40pc since September amid fears that the global credit crisis is stalling the emirate’s economy -
Nakheel said earlier this week it has witnessed a slowdown in the rate of real estate sales. Last month the developer announced it had scaled back dredging work on its massive Palm Deira project, the largest of three palm archipelagos that is planned to house more than 1 million people.
Meanwhile buyers are struggling to get mortgage loans in the region. Dubai Islamic mortgage lender Amlak told Reuters today it had suspended new mortgage loans as Dubai’s real estate sector shows further signs of stress.
Dubai-based Elysian Real Estate this week sent out a text message to up to 40,000 mobile phones advertising distressed property sales, offering a luxury six bedroom, six bathroom villa in Dubailand, a multi-billion-dollar luxury theme park well 30 pc beyond the prices 3 month ago - as buyers just stay away.
The Palm is the flagship part of Dubai’s ambitious ‘Universe’ development. The Universe will extend Dubai’s coastline to around 625 miles (calculated by measuring the coastal circumferences of the various manmade archipelagos), around 15 times its natural 43 miles.
By Louise Armitstead /www.telegraph.co.uk/finance/
Last Updated: 10:27AM GMT 21 Nov 2008
So - there ist is - the bubble is bursting ...
and - btw - the 4,7 Million Springs Villa Type 4E is still advertised at the Choitram - as just nobody wants to waste his money on a declining property market now - Thoughts ??
Property prices on the Palm Jumeirah, the island in Dubai that has been dubbed the ‘eighth wonder of the world’, have plummeted by as much as over 40pc since September amid fears that the global credit crisis is stalling the emirate’s economy -
Nakheel said earlier this week it has witnessed a slowdown in the rate of real estate sales. Last month the developer announced it had scaled back dredging work on its massive Palm Deira project, the largest of three palm archipelagos that is planned to house more than 1 million people.
Meanwhile buyers are struggling to get mortgage loans in the region. Dubai Islamic mortgage lender Amlak told Reuters today it had suspended new mortgage loans as Dubai’s real estate sector shows further signs of stress.
Dubai-based Elysian Real Estate this week sent out a text message to up to 40,000 mobile phones advertising distressed property sales, offering a luxury six bedroom, six bathroom villa in Dubailand, a multi-billion-dollar luxury theme park well 30 pc beyond the prices 3 month ago - as buyers just stay away.
The Palm is the flagship part of Dubai’s ambitious ‘Universe’ development. The Universe will extend Dubai’s coastline to around 625 miles (calculated by measuring the coastal circumferences of the various manmade archipelagos), around 15 times its natural 43 miles.
By Louise Armitstead /www.telegraph.co.uk/finance/
Last Updated: 10:27AM GMT 21 Nov 2008
So - there ist is - the bubble is bursting ...
and - btw - the 4,7 Million Springs Villa Type 4E is still advertised at the Choitram - as just nobody wants to waste his money on a declining property market now - Thoughts ??
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got chatting to a japanese man whose here with the dubai metro project, in short, he said when japan's economy gave in it was like 'a car travelling at 60 miles an hour hitting a brick wall'..in regards to dubai, in his words, 'that car is like travelling at 100 miles'
guess it all depends if big brother down the road is willing to shed a few billion dirhams in loose change
guess it all depends if big brother down the road is willing to shed a few billion dirhams in loose change
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There is a silver lining...just think what would happen if, like in any other major city and outlying area, you could actually AFFORD to buy a house!!!!???? If housing prices rationalize and allow someone to buy, as an example, a 4 bedroom home in the Ranches for between 1.5 and 2 million dhms you would see a large increase in people buying to live as opposed to speculation.
That is good for the market - just bad for the speculators and, to be quite blunt, I couldn't give a toss about the speculators.
That is good for the market - just bad for the speculators and, to be quite blunt, I couldn't give a toss about the speculators.
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Agree, no one cares about the speculators, they've inflated the bubble, it's only fair they feel full force of the blast when it bursts. There's no value for money in DXB and let's not forget AUH/SHJ/RAK either. The sun shines here, big deal but the quality of construction is apalling and as for the the workmanship on things like the interiors and fittings, well it's non existant. Pay peanuts and you know the rest...
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Would have to agree. When I see TV advertisements like Al Zohra, I am puzzeled. Unless you have so much money that you really don't know what to do with it anymore, why would somebody buy his luxury home in this part of the world, rather than the Mediterranean, the Caribbean or a number of other parts of the world. 
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The average price of a four-bedroom garden home on The Palm Jumeirah during the first quarter of 2008 was Dh2,200 per sq ft. During the second quarter the price shot up to Dh2,700 and in the third quarter it climbed to Dh3,000. Now the price has fallen to Dh2,700.
Hardly the bottom falling out of the market though.
Now what has collapsed are off-plan prices - The average sale price on JA Waterfront in September was Dh3,150 per sq ft. In October the price fell to Dh2,000 – a 36 per cent decline in a month. And this month the figure has fallen a further five per cent to Dh1,900.
Why anyone would pay more for off-plan property than completed was always a mystery to me.
LOL - you have obviously never bought a new house in the UK if you think Dubai's are badly built 
Hardly the bottom falling out of the market though.
Now what has collapsed are off-plan prices - The average sale price on JA Waterfront in September was Dh3,150 per sq ft. In October the price fell to Dh2,000 – a 36 per cent decline in a month. And this month the figure has fallen a further five per cent to Dh1,900.
Why anyone would pay more for off-plan property than completed was always a mystery to me.
The sun shines here, big deal but the quality of construction is apalling and as for the the workmanship on things like the interiors and fittings, well it's non existant.
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... and as reported by Gulfnews: Atlantis slashes room rates as visitors stay away
Best i got was 1800 dhs for 1 night, my guess is a LOT of Gulfnews employees will be staying in Atlantis in the next week or two.
They did mention if i had a Emirates Platinum card a few times
EGGW
They did mention if i had a Emirates Platinum card a few times
EGGW
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Re Post #8 above - Atlantis deals ex UK
Atlantis has full page ads in at least two Sunday Papers in UK - Mail on S & S Times) today 23 November
Deal is £899 pp, double occupancy De Luxe Rooms inc breakfast, 3 nights + 4th Free
Between 23 Nov '08 & 31 May '09 with blackout dates10 Dec - 9 Jan, 13 - 23 Feb & 20 Mar - 18 April
Includes flights (Y presumably) and airport transfers
Book by 18 Dec (includes various kids deals as well)
PZU - Out of Africa (Retired)
Stand by for the CHAV invasion
Deal is £899 pp, double occupancy De Luxe Rooms inc breakfast, 3 nights + 4th Free
Between 23 Nov '08 & 31 May '09 with blackout dates10 Dec - 9 Jan, 13 - 23 Feb & 20 Mar - 18 April
Includes flights (Y presumably) and airport transfers
Book by 18 Dec (includes various kids deals as well)
PZU - Out of Africa (Retired)
Stand by for the CHAV invasion
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... Ahhh - here we go: Hte Palm Jebel-Ali Investments are doing a "formation nose-dive" with their Jumeirah sibling - as found in ArabianBusiness.com - Middle East Business, Financial & Industry News, Events & Information
"House prices on the Palm Jebel Ali, second largest of Nakheel’s palm-shaped islands, have fallen by as much as 40 percent in the last two months as the global financial crisis sees foreign investors move to liquidate assets in Dubai, according to three Dubai-based real estate agents.
“I never expected [prices on the Palm Jebel Ali] would have come back so quickly and by so much,” said Jeroen Van Der Geer, partner at AA Properties in Dubai. “We are back to a level of one and a half to two years ago.”
The global financial crisis has hit demand from foreign investors, which make up a large percentage of property buyers in Dubai, while tightening liquidity has made home financing more difficult, agents said.
Local mortgage providers have slashed home financing from 90 percent to as little as 60 percent in recent weeks.
The price of five and six bedroom signature villas, the most expensive properties on Palm Jebel Ali, have dropped from around 16 million dirhams ($4.35 million) to 9 million dirhams since the beginning of September, according to figures from AA Properties.
But that still represents a premium of between 70 percent to 80 percent on the original launch prices.
A four-bed garden home has fallen from around 7.4 million dirhams to 4.1 million dirhams, according to the figures, with the premium dropping from around 160 percent to 45 percent.
The figures show a three-bed water home, the cheaper of the Palm Jebel Ali properties, is now selling for around 3.8 million dirhams, when at the beginning of September it was selling for 6.2 million dirhams, with the premium falling from about 210 percent to 90 percent.
Jodie Smith, managing director of Elysian Real Estate, said garden homes were currently selling at around 4.5 million dirhams, compared to 8.6 million at the beginning of September, while water homes had come down to around 4 million dirhams from 6.5 million dirhams.
David Rowland, sales consultant at Dubai’s Smith & Ken Real Estate, said he had seen premiums on signature villas drop from 200-210 percent in July/August to 75-80 percent currently.
Rowland said he had also seen garden homes selling at a 35-40 percent premium, compared to 130-160 percent in July/August.
He described the drop as “quite alarming”.
By Claire Ferris-Lay and Dylan ArabianBusiness.com - Middle East Business, Financial & Industry News, Events & Information
"House prices on the Palm Jebel Ali, second largest of Nakheel’s palm-shaped islands, have fallen by as much as 40 percent in the last two months as the global financial crisis sees foreign investors move to liquidate assets in Dubai, according to three Dubai-based real estate agents.
“I never expected [prices on the Palm Jebel Ali] would have come back so quickly and by so much,” said Jeroen Van Der Geer, partner at AA Properties in Dubai. “We are back to a level of one and a half to two years ago.”
The global financial crisis has hit demand from foreign investors, which make up a large percentage of property buyers in Dubai, while tightening liquidity has made home financing more difficult, agents said.
Local mortgage providers have slashed home financing from 90 percent to as little as 60 percent in recent weeks.
The price of five and six bedroom signature villas, the most expensive properties on Palm Jebel Ali, have dropped from around 16 million dirhams ($4.35 million) to 9 million dirhams since the beginning of September, according to figures from AA Properties.
But that still represents a premium of between 70 percent to 80 percent on the original launch prices.
A four-bed garden home has fallen from around 7.4 million dirhams to 4.1 million dirhams, according to the figures, with the premium dropping from around 160 percent to 45 percent.
The figures show a three-bed water home, the cheaper of the Palm Jebel Ali properties, is now selling for around 3.8 million dirhams, when at the beginning of September it was selling for 6.2 million dirhams, with the premium falling from about 210 percent to 90 percent.
Jodie Smith, managing director of Elysian Real Estate, said garden homes were currently selling at around 4.5 million dirhams, compared to 8.6 million at the beginning of September, while water homes had come down to around 4 million dirhams from 6.5 million dirhams.
David Rowland, sales consultant at Dubai’s Smith & Ken Real Estate, said he had seen premiums on signature villas drop from 200-210 percent in July/August to 75-80 percent currently.
Rowland said he had also seen garden homes selling at a 35-40 percent premium, compared to 130-160 percent in July/August.
He described the drop as “quite alarming”.
By Claire Ferris-Lay and Dylan ArabianBusiness.com - Middle East Business, Financial & Industry News, Events & Information
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The Times Today - First came a boom, then fireworks, but is Dubai’s property market i
Sonia Verma in Dubai
div#related-article-links p a, div#related-article-links p a:visited {color:#06c;}For a few hours, the glitz and the glamour, the red carpet and, above all, the astonishing fireworks disguised the reality that is dawning over Dubai – but only for those few hours. Not even the £13.5 million extravaganza that launched the £1 billion Atlantis Resort could hide the fact that Dubai’s property boom, which has fuelled double-digit growth for five years, is showing signs of turning to bust.
“It’s been ten times worse than expected. The liquidity is absolutely frozen. There’s no money. It’s just gone. If the Government doesn’t act really quickly, we’ll slip into an Indonesian-style bust,” said one of Dubai’s leading bankers, who did not want to be named. He was echoing a growing consensus in the region. “These last six weeks have changed the face of the Earth,” he said.
Dubai’s property boom was fuelled largely by investors who bought properties off-plan. Most had no intention of ever living in the buildings, intending, instead, to sell them on and collect a tidy profit. Most also used borrowed money to finance their payments, according to analysts, intending to use a cut of their profits to pay back their loans.
But in recent weeks credit has virtually evaporated, with international and local banks tightening credit. International investors have grown nervous as local economists have downgraded Dubai’s economic outlook. And demand for properties has fallen into a slump, with job losses and the cancellations of new developments adding up.
Related Links
A striking example of Dubai’s old and new realities was apparent last Thursday. As celebrity guests were whisked away by private helicopters from the Atlantis resort, residents on The Palm Jumeirah, the artificial island that is home to the hotel, were left to digest bad news. The value of their properties has fallen as much as 40 per cent since September, according to estate agents, as buyers struggle to secure mortgages. When the development, built by the state-owned Nakheel, went on to the market seven years ago, its luxury villas were snapped up by the likes David Beckham and Michael Schumacher for up to £5 million. Today Nakheel estimates that British buyers own nearly a quarter of the villas on the Palm.
Last week Amlak, the country’s largest lender, said that it would suspend new loans completely because of a lack of funds, a move unprecedented in this market. Yesterday the Government merged Amlak and Tamweel, the country’s other top lender, into the federally owned Real Estate Bank in an effort to loosen lending by pooling resources.
“People have really begun to fear a crash in the market,” Chris Dommett, chief executive of John Charcol Dubai, a mortgage advisory firm, said. “Banks aren’t suspending loans because of a lack of demand, they’re doing it because they don’t have any liquidity. Transactions have just stopped and everybody is holding their breath, waiting to see what will happen.”
According to new data from HSBC, property prices fell last month by 4 per cent in Dubai and 5 per cent in neigh-bouring Abu Dhabi. The credit squeeze is having a devastating effect on existing buyers, who no longer are able to meet payments on their existing investment properties. “Anybody who’s bought into this market to flip property and make a quick profit – they’re all getting crucified,” another banker said, adding that several of his clients were trying to “wriggle out” of their contracts with developers for properties that they had bought off-plan.
Brokers are reporting a sharp increase in panic-selling. Last week the Dubai-based Elysian Real Estate sent a text message to up to 40,000 mobile phones advertising distressed property sales. The text offered a luxury six-bedroom, six-bathroom villa in Dubailand, a multibillion-dollar luxury theme park on the outskirts of the city-state, at an advertised cost of about £3.86 million – about half its original price. Robert Macnair, Elysian’s sales director, told The Times: “We have had a sharp increase in clients who are looking to sell because the market has done what it’s done. There is a new urgency to these sales.
“The market has slowed dramatically. On a number of occasions, these investors or speculators actually can’t afford to make the next payment.”
Developers are also feeling the pressure. Damac, one of Dubai’s leading developers, cut 200 jobs last week. Nakheel has also said that it will scale back construction plans for its next man-made island, the Palm Deira.
Dubai is considering stronger measures to restore lending, but analysts say the market lacks the maturity to embrace them. Banks, for example, have been unwilling so far to tap into billions of dollars of emergency funding made available by the Government in recent months as the international economy heads for global recession.
Economists say that the Government needs to take a tougher stance. If credit does loosen, some predict a quick rebound.
Simon Williams, HSBC’s Middle East economist, said: “Real estate markets anywhere in the world are volatile . . . but they tend to work themselves out as the real economy tends to perform well, as it does in the Gulf.
“I still see very low vacancy rates across the UAE and rents are high. Those two key variables suggest that the property market will endure.”
div#related-article-links p a, div#related-article-links p a:visited {color:#06c;}For a few hours, the glitz and the glamour, the red carpet and, above all, the astonishing fireworks disguised the reality that is dawning over Dubai – but only for those few hours. Not even the £13.5 million extravaganza that launched the £1 billion Atlantis Resort could hide the fact that Dubai’s property boom, which has fuelled double-digit growth for five years, is showing signs of turning to bust.
“It’s been ten times worse than expected. The liquidity is absolutely frozen. There’s no money. It’s just gone. If the Government doesn’t act really quickly, we’ll slip into an Indonesian-style bust,” said one of Dubai’s leading bankers, who did not want to be named. He was echoing a growing consensus in the region. “These last six weeks have changed the face of the Earth,” he said.
Dubai’s property boom was fuelled largely by investors who bought properties off-plan. Most had no intention of ever living in the buildings, intending, instead, to sell them on and collect a tidy profit. Most also used borrowed money to finance their payments, according to analysts, intending to use a cut of their profits to pay back their loans.
But in recent weeks credit has virtually evaporated, with international and local banks tightening credit. International investors have grown nervous as local economists have downgraded Dubai’s economic outlook. And demand for properties has fallen into a slump, with job losses and the cancellations of new developments adding up.
Related Links
A striking example of Dubai’s old and new realities was apparent last Thursday. As celebrity guests were whisked away by private helicopters from the Atlantis resort, residents on The Palm Jumeirah, the artificial island that is home to the hotel, were left to digest bad news. The value of their properties has fallen as much as 40 per cent since September, according to estate agents, as buyers struggle to secure mortgages. When the development, built by the state-owned Nakheel, went on to the market seven years ago, its luxury villas were snapped up by the likes David Beckham and Michael Schumacher for up to £5 million. Today Nakheel estimates that British buyers own nearly a quarter of the villas on the Palm.
Last week Amlak, the country’s largest lender, said that it would suspend new loans completely because of a lack of funds, a move unprecedented in this market. Yesterday the Government merged Amlak and Tamweel, the country’s other top lender, into the federally owned Real Estate Bank in an effort to loosen lending by pooling resources.
“People have really begun to fear a crash in the market,” Chris Dommett, chief executive of John Charcol Dubai, a mortgage advisory firm, said. “Banks aren’t suspending loans because of a lack of demand, they’re doing it because they don’t have any liquidity. Transactions have just stopped and everybody is holding their breath, waiting to see what will happen.”
According to new data from HSBC, property prices fell last month by 4 per cent in Dubai and 5 per cent in neigh-bouring Abu Dhabi. The credit squeeze is having a devastating effect on existing buyers, who no longer are able to meet payments on their existing investment properties. “Anybody who’s bought into this market to flip property and make a quick profit – they’re all getting crucified,” another banker said, adding that several of his clients were trying to “wriggle out” of their contracts with developers for properties that they had bought off-plan.
Brokers are reporting a sharp increase in panic-selling. Last week the Dubai-based Elysian Real Estate sent a text message to up to 40,000 mobile phones advertising distressed property sales. The text offered a luxury six-bedroom, six-bathroom villa in Dubailand, a multibillion-dollar luxury theme park on the outskirts of the city-state, at an advertised cost of about £3.86 million – about half its original price. Robert Macnair, Elysian’s sales director, told The Times: “We have had a sharp increase in clients who are looking to sell because the market has done what it’s done. There is a new urgency to these sales.
“The market has slowed dramatically. On a number of occasions, these investors or speculators actually can’t afford to make the next payment.”
Developers are also feeling the pressure. Damac, one of Dubai’s leading developers, cut 200 jobs last week. Nakheel has also said that it will scale back construction plans for its next man-made island, the Palm Deira.
Dubai is considering stronger measures to restore lending, but analysts say the market lacks the maturity to embrace them. Banks, for example, have been unwilling so far to tap into billions of dollars of emergency funding made available by the Government in recent months as the international economy heads for global recession.
Economists say that the Government needs to take a tougher stance. If credit does loosen, some predict a quick rebound.
Simon Williams, HSBC’s Middle East economist, said: “Real estate markets anywhere in the world are volatile . . . but they tend to work themselves out as the real economy tends to perform well, as it does in the Gulf.
“I still see very low vacancy rates across the UAE and rents are high. Those two key variables suggest that the property market will endure.”
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I love the BS about "prices have dropped X percent". One simple point - if the properties aren't selling, how do you know what the "market" is? To have a market, there must be buying as well as selling. The prices you see now are not what people will buy at, they're priced at what owners think they will need to offer in order to sell. And we see attempted soothing comments from the vested interests such as estate agents and banks, while at the same time they reach for their helmet....
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Agreed Bear.
You read the various quotes in the papers playing down the effects of the economic Tsunami and they're from those who are in the property sector on which they have gorged for several years. Now the famine's here they're either in denial or cutting their losses.
It has ground to a halt and regardless of the current price per square meter the square root of FA is being sold.
You read the various quotes in the papers playing down the effects of the economic Tsunami and they're from those who are in the property sector on which they have gorged for several years. Now the famine's here they're either in denial or cutting their losses.
It has ground to a halt and regardless of the current price per square meter the square root of FA is being sold.
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...a there you - go - the Burj Dubai prices are falling as well now by 25-30 up to 50 pc %
Burj Dubai property prices fall by Nathalie Gillet -http://www.thenational.ae
Property prices within the Burj Dubai tower have declined by up to 50 per cent, say brokers. Paulo Vecina / The National
Residential prices for Emaar Properties’s signature Downtown Burj Dubai development have fallen by at least 22 per cent, with reductions of up to 50 per cent within the Burj Dubai tower itself, according to property brokers.
Some high-end developments in Abu Dhabi are also recording significant price declines in the secondary market, where properties change hands after being sold by the developer.
The price corrections underscore how the credit crunch and prospects of a global recession are affecting the property market, particularly high-end developments.
According to statistics from the international estate agents Hamptons, which is owned by Emaar, prices in the Downtown Burj Dubai area rose 88 per cent in the year to September. Other brokers said some prices more than doubled.
“This is indicative of the whole marketplace,” said Vincent Easton, the head of sales at Sherwoods property agency in Dubai. “Downtown [Burj Dubai] had quite a sharp spike in pricing. Anything that has a sharp spike is open to a correction if the market slows. Really, ultimately we will see the correct level.”
Sherwoods, which closely monitors transactions at the development, said it had observed an average decline of 25 per cent, including the Burj Dubai tower. Prices in the tower – scheduled to become the tallest in the world – increased the most, and have subsequently fallen sharply. Prices outside the tower fell from an average of Dh3,500 (US$952) per square foot to Dh2,700, Sherwoods said. “When you exclude Burj Dubai from the area, you get a more realistic idea of the decline in the development,” said a market research officer at Sherwoods. Flats on 8 Boulevard Walk, for instance, dropped from Dh3,300 per sq ft to Dh2,500 per sq ft in three weeks – a 24 per cent decrease.
Sujeeva De Silva, another Dubai-based property consultant, said prices in the Old Town quarter of the development had fallen 30 per cent in the past month, along with nearly 20 per cent at the South Ridges and Residences areas.
Burj Dubai property prices fall by Nathalie Gillet -http://www.thenational.ae
Property prices within the Burj Dubai tower have declined by up to 50 per cent, say brokers. Paulo Vecina / The National
Residential prices for Emaar Properties’s signature Downtown Burj Dubai development have fallen by at least 22 per cent, with reductions of up to 50 per cent within the Burj Dubai tower itself, according to property brokers.
Some high-end developments in Abu Dhabi are also recording significant price declines in the secondary market, where properties change hands after being sold by the developer.
The price corrections underscore how the credit crunch and prospects of a global recession are affecting the property market, particularly high-end developments.
According to statistics from the international estate agents Hamptons, which is owned by Emaar, prices in the Downtown Burj Dubai area rose 88 per cent in the year to September. Other brokers said some prices more than doubled.
“This is indicative of the whole marketplace,” said Vincent Easton, the head of sales at Sherwoods property agency in Dubai. “Downtown [Burj Dubai] had quite a sharp spike in pricing. Anything that has a sharp spike is open to a correction if the market slows. Really, ultimately we will see the correct level.”
Sherwoods, which closely monitors transactions at the development, said it had observed an average decline of 25 per cent, including the Burj Dubai tower. Prices in the tower – scheduled to become the tallest in the world – increased the most, and have subsequently fallen sharply. Prices outside the tower fell from an average of Dh3,500 (US$952) per square foot to Dh2,700, Sherwoods said. “When you exclude Burj Dubai from the area, you get a more realistic idea of the decline in the development,” said a market research officer at Sherwoods. Flats on 8 Boulevard Walk, for instance, dropped from Dh3,300 per sq ft to Dh2,500 per sq ft in three weeks – a 24 per cent decrease.
Sujeeva De Silva, another Dubai-based property consultant, said prices in the Old Town quarter of the development had fallen 30 per cent in the past month, along with nearly 20 per cent at the South Ridges and Residences areas.