Anyone bought a Jumeira Island villa?
Nov 22nd 2004, 11:20 am
#16
Guest
Posts: n/a
Re: Anyone bought a Jumeira Island villa?
[QUOTE=TA5]
what makes you so sure prices will drop down completely? you sound like you are dead sure of it.. not having a go, just curious
Originally Posted by dubaiexpat
but that's the beauty of it darling most expats won't pay for their houses, the company's rental allowance does so no money lost!!! QUOTE]
I'm assuming you mean use their rental allowance to pay off their mortgage, which is good and all, until
1) They lose their job and have no way to pay that mortgage
2) The value of the house drops precipitously from its purchase price (which it will, guaranteed), and said expat wants to move back to the UK, US, or wherever (or just loses their job). That expat then is saddled with dealing with the negative equity relating to their mortgage, basically, if they sell the house, they'll continue to pay off the mortgage difference between the mortgage (theirs) and the homes sale price, basically paying for nothing, and getting nothing in return.
I'm assuming you mean use their rental allowance to pay off their mortgage, which is good and all, until
1) They lose their job and have no way to pay that mortgage
2) The value of the house drops precipitously from its purchase price (which it will, guaranteed), and said expat wants to move back to the UK, US, or wherever (or just loses their job). That expat then is saddled with dealing with the negative equity relating to their mortgage, basically, if they sell the house, they'll continue to pay off the mortgage difference between the mortgage (theirs) and the homes sale price, basically paying for nothing, and getting nothing in return.
Nov 22nd 2004, 12:32 pm
#17
Banned (Always Correct)
Joined: Aug 2004
Posts: 941
Re: Anyone bought a Jumeira Island villa?
Originally Posted by rafter
what makes you so sure prices will drop down completely? you sound like you are dead sure of it.. not having a go, just curious
the main reason prices will drop is that there is no demand for property right now, real demand that is. All these developments are being sold to investors who for the most part are sitting on them for 5-10 years without renting them or anything. This false demand is why prices are inflating so quickly. Try buying a new villa or apartment direct from the landlord, if not impossible, its a tedious affair (prices increasing, lies lies lies), why, because landlords are selling huge chunks of developments to investors just to make a quick return on their development cost.
Theoretically there is no problem with this, however given dubai's insatiable thirst for rapid growth, their WILL be tremendous oversupply in the 'new' housing market in the coming years. Normally this would involve only a slight dip in prices, or a few years of no growth. However due to the large majority of new development stock being controlled by investors this will set off an alarm in their world, at which point they will quickly try to dump these properties before the market bottoms out, unless they want to turn their original 5 yr investment into a 30 year investment. This will compound the effect of the oversupply, as now there will be even more oversupply as more units hit the market, units that have been completed for 3-4 years yet never occupied.
If you want to see what i'm talking about, take drive over to dubai marina at night around 7, you'll notice that only about 15% of the units are occupied, the empty parking garage confirms this. There is one building that has been completed for some months now and has a total of 1 occupant, because the rest of the apartments are owned by a total of 3 people.
And for the ones that will argue 'yes', no the population of dubai, tourist, expat, or local, is not growing at nearly the pace of infrastructure, including housing, and will not 'catch up' nearly enough to avert this.
Nov 22nd 2004, 12:49 pm
#18
Banned
Thread Starter
Joined: Oct 2004
Location: Dubai
Posts: 10,998
Re: Anyone bought a Jumeira Island villa?
Originally Posted by TA5
look up the last conversation on property
the main reason prices will drop is that there is no demand for property right now, real demand that is. All these developments are being sold to investors who for the most part are sitting on them for 5-10 years without renting them or anything. This false demand is why prices are inflating so quickly. Try buying a new villa or apartment direct from the landlord, if not impossible, its a tedious affair (prices increasing, lies lies lies), why, because landlords are selling huge chunks of developments to investors just to make a quick return on their development cost.
Theoretically there is no problem with this, however given dubai's insatiable thirst for rapid growth, their WILL be tremendous oversupply in the 'new' housing market in the coming years. Normally this would involve only a slight dip in prices, or a few years of no growth. However due to the large majority of new development stock being controlled by investors this will set off an alarm in their world, at which point they will quickly try to dump these properties before the market bottoms out, unless they want to turn their original 5 yr investment into a 30 year investment. This will compound the effect of the oversupply, as now there will be even more oversupply as more units hit the market, units that have been completed for 3-4 years yet never occupied.
If you want to see what i'm talking about, take drive over to dubai marina at night around 7, you'll notice that only about 15% of the units are occupied, the empty parking garage confirms this. There is one building that has been completed for some months now and has a total of 1 occupant, because the rest of the apartments are owned by a total of 3 people.
And for the ones that will argue 'yes', no the population of dubai, tourist, expat, or local, is not growing at nearly the pace of infrastructure, including housing, and will not 'catch up' nearly enough to avert this.
the main reason prices will drop is that there is no demand for property right now, real demand that is. All these developments are being sold to investors who for the most part are sitting on them for 5-10 years without renting them or anything. This false demand is why prices are inflating so quickly. Try buying a new villa or apartment direct from the landlord, if not impossible, its a tedious affair (prices increasing, lies lies lies), why, because landlords are selling huge chunks of developments to investors just to make a quick return on their development cost.
Theoretically there is no problem with this, however given dubai's insatiable thirst for rapid growth, their WILL be tremendous oversupply in the 'new' housing market in the coming years. Normally this would involve only a slight dip in prices, or a few years of no growth. However due to the large majority of new development stock being controlled by investors this will set off an alarm in their world, at which point they will quickly try to dump these properties before the market bottoms out, unless they want to turn their original 5 yr investment into a 30 year investment. This will compound the effect of the oversupply, as now there will be even more oversupply as more units hit the market, units that have been completed for 3-4 years yet never occupied.
If you want to see what i'm talking about, take drive over to dubai marina at night around 7, you'll notice that only about 15% of the units are occupied, the empty parking garage confirms this. There is one building that has been completed for some months now and has a total of 1 occupant, because the rest of the apartments are owned by a total of 3 people.
And for the ones that will argue 'yes', no the population of dubai, tourist, expat, or local, is not growing at nearly the pace of infrastructure, including housing, and will not 'catch up' nearly enough to avert this.
Just a point TA5 Investors will not sit on empty properties for 5 to 10 years that does not make sense. You are saying that they will buy now at inflated prices and sell when the bottom has fallen out of the market!!!!
Plus the new laws coming in will stop them from buying and selling for a quick profit, they will have to keep them for 2 years. I agree lots of properties are sold and standing empty but that is because most people are not willing to pay inflated prices 'secondhand' when they can wait for the next project/phase to finish and buy 'firsthand'.
PLUS I am sure Emaar have done their homework and will not be building 1000's more houses for them not to be sold. FYI all EH properties are sold 'firsthand' and there are not many 'secondhand' to be had. Those that are are being snapped up.
I agree with some of what you are saying but the rest doesn't quite add up.
Nov 22nd 2004, 2:44 pm
#19
Banned (Always Correct)
Joined: Aug 2004
Posts: 941
Re: Anyone bought a Jumeira Island villa?
Investors are buying these properties figuring on selling them in 5 years for a BIG profit, not the small buck you get flipping properties that are brand new.
JB Wrote:
I agree lots of properties are sold and standing empty but that is because most people are not willing to pay inflated prices 'secondhand' when they can wait for the next project/phase to finish and buy 'firsthand'."
Exactly, as long as there continues to be new supply coming to the market people (users) will buy up the limited number of properties available in new phases/developments, without any demand for the resales. But as the number of properties owned by investors continues to build up, eventually they are going to have to go somewhere, and when they all hit the market its going to cause downward pressure on prices. As long as they continue building new stuff there will be no demand for the resales, and at the rate they are building the glut of 'potential and necessary (investor owned)' resale properties will have no demand for a long time.
JB Wrote:
I agree lots of properties are sold and standing empty but that is because most people are not willing to pay inflated prices 'secondhand' when they can wait for the next project/phase to finish and buy 'firsthand'."
Exactly, as long as there continues to be new supply coming to the market people (users) will buy up the limited number of properties available in new phases/developments, without any demand for the resales. But as the number of properties owned by investors continues to build up, eventually they are going to have to go somewhere, and when they all hit the market its going to cause downward pressure on prices. As long as they continue building new stuff there will be no demand for the resales, and at the rate they are building the glut of 'potential and necessary (investor owned)' resale properties will have no demand for a long time.
Last edited by TA5; Nov 22nd 2004 at 2:47 pm.
Nov 22nd 2004, 2:46 pm
#20
Banned
Thread Starter
Joined: Oct 2004
Location: Dubai
Posts: 10,998
Re: Anyone bought a Jumeira Island villa?
[QUOTE=TA5]Investors are buying these properties figuring on selling them in 5 years for a BIG profit, not the small buck you get flipping properties that are brand new.
I agree
I agree lots of properties are sold and standing empty but that is because most people are not willing to pay inflated prices 'secondhand' when they can wait for the next project/phase to finish and buy 'firsthand'.[\quote]
Exactly, but only a limited number of properties are being sold firsthand in each development, so as the number of properties owned by investors builds up, eventually they are going to have to go somewhere eventually, and when they all hit the market its going to cause downward pressure on prices.
Exactly, but only a limited number of properties are being sold firsthand in each development, so as the number of properties owned by investors builds up, eventually they are going to have to go somewhere eventually, and when they all hit the market its going to cause downward pressure on prices.
I agree
Nov 22nd 2004, 2:47 pm
#21
Banned (Always Correct)
Joined: Aug 2004
Posts: 941
Re: Anyone bought a Jumeira Island villa?
Originally Posted by Jellybean
I agree
sorry, i edited a bit before your post
Nov 22nd 2004, 2:51 pm
#22
Banned
Thread Starter
Joined: Oct 2004
Location: Dubai
Posts: 10,998
Re: Anyone bought a Jumeira Island villa?
Originally Posted by TA5
sorry, i edited a bit before your post
I still agree
Nov 23rd 2004, 7:32 pm
#23
The 5th Amendment
Joined: Aug 2004
Location: Dubai City
Posts: 3,142
Re: Anyone bought a Jumeira Island villa?
Originally Posted by Jellybean
I still agree
anyone read Arabian News this week with the Kanoo article?
Nov 24th 2004, 3:05 am
#24
BE Enthusiast
Joined: Oct 2004
Posts: 927
Re: Anyone bought a Jumeira Island villa?
Originally Posted by joseph.creative
anyone read Arabian News this week with the Kanoo article?
No, enlighten us please?
