Dubai house price crash - 41% in Q1 2009
Apr 29th 2009, 4:37 am
#2
Account Closed
Joined: Jul 2007
Posts: 7,028
Re: Dubai house price crash - 41% in Q1 2009
Still more to come I expect.
Apr 29th 2009, 4:43 am
#3
Go on.. Pull my finger..
Joined: Jul 2008
Location: Dubai
Posts: 5,726
Re: Dubai house price crash - 41% in Q1 2009
I'm gonna sit and wait to see what that property fcwit Diablo has to say...
Lets see him spin this... coz Alistair Campbell he aint....
Lets see him spin this... coz Alistair Campbell he aint....
Apr 29th 2009, 5:30 am
#4
meonline
Joined: Apr 2007
Location: Dubai, UAE
Posts: 114
Re: Dubai house price crash - 41% in Q1 2009
Let’s see the government deny this story as the report comes from a reputable source: Colliers International. Yep, the speculators have left the market and I believe will continue to leave. Expect prices to fall further, and more cooling down of the market to acceptable levels. Dubai could well be a much different place in 2010 economically speaking.
Apr 29th 2009, 5:42 am
#5
BE Enthusiast
Joined: Jun 2008
Posts: 788
Re: Dubai house price crash - 41% in Q1 2009
Let’s see the government deny this story as the report comes from a reputable source: Colliers International. Yep, the speculators have left the market and I believe will continue to leave. Expect prices to fall further, and more cooling down of the market to acceptable levels. Dubai could well be a much different place in 2010 economically speaking.
Apr 29th 2009, 6:06 am
#8
Joined: May 2007
Posts: 317
Re: Dubai house price crash - 41% in Q1 2009
Well, first of all I tend to think that everyone likes to point their finger to Dubai and price fall because they don’t want to think about the situation at home. The situation in UK / USA / Australia is at least the same if not worse than here. I bought an apartment in Perth 2 years back – off plan and cannot sell it for the price I paid 2 years ago. I can still sell my apartment in Dubai for a better price than I paid 2 years ago.
I remember the topic about the ‘bubble burst’ and discussions we had back then. However, my perception was that everyone was saying that the bubble would burst because of un-sustainability of such fast pace development lack of economy basis, etc. etc. There was no mentioning of the world economy going down the toilet and pulling Dubai together with it.
I don’t think that ‘bubble burst’ as discussed on this forum ever happened in Dubai. What we see here seems to be an outcome of the global crash and not because we were over-building; or over pricing in Dubai etc. If the situation in the world was honky dory and we were struggling here – I would surrender, but that’s not the case here as I see it.
As for the 41% of prices going down – I assume we talk about the drop of the ‘selling price’ from the peak back in 2008? At this point in time I am not sure how much of that is the actual value of the properties and how much is contributed to the fact that one cannot get a loan. If the banks offer loans at say 4-5% interest with 5-10% deposit I would think that there would be a few more buyers around. I certainly would be. I just don’t have the money at the moment to buy a few of those apartments even at the risk that the price goes further down.
I am personally very interested to see what happens in May / June / July and to the end of this year. I am interested to see what happens to those who paid apartment say 3 million and now have no money to pay mortgage due to rent price falls (assuming they relied on full rent)? If the guy still owes 2.8M to the bank and bank takes the property I wouldn’t expect the bank to sell it below 2.8M so I cannot see how those properties will go below that price? Unless banks decide to sell it for any price – and that would be good for those waiting with some money left to invest.
I.e., in the first year the guy gets AED 300,000 for rent and he pays the loan. This year he cannot sustain it – he offers it to the tenant for AED 250,000, gets the cheque and cash it in and then runs away leaving the property with the bank (like the cars at the airport). What happens next I am really interested to see.
I rent an apartment for AED 200,000 in JBR. I have no problem if my tenant goes and finds something cheaper. I am fairly positive I’ll find someone to fill in for more money. Born optimistic. Dubai apartments and emirates flights are still half full.
Apr 29th 2009, 6:09 am
#9
BE Forum Addict
Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: Dubai house price crash - 41% in Q1 2009
Last edited by IndieG; Apr 29th 2009 at 6:14 am. Reason: grammar
Apr 29th 2009, 6:10 am
#10
Account Closed
Thread Starter
Joined: May 2006
Posts: 351
Re: Dubai house price crash - 41% in Q1 2009
OMG I got bored half way through reading your post however loved your last sentence "Dubai apartments and emirates flights are still half full"! Wonderful.
Apr 29th 2009, 8:06 am
#11
BE Enthusiast
Joined: Oct 2006
Posts: 537
Re: Dubai house price crash - 41% in Q1 2009
Well, first of all I tend to think that everyone likes to point their finger to Dubai and price fall because they don’t want to think about the situation at home. The situation in UK / USA / Australia is at least the same if not worse than here. I bought an apartment in Perth 2 years back – off plan and cannot sell it for the price I paid 2 years ago. I can still sell my apartment in Dubai for a better price than I paid 2 years ago.
I remember the topic about the ‘bubble burst’ and discussions we had back then. However, my perception was that everyone was saying that the bubble would burst because of un-sustainability of such fast pace development lack of economy basis, etc. etc. There was no mentioning of the world economy going down the toilet and pulling Dubai together with it.
I don’t think that ‘bubble burst’ as discussed on this forum ever happened in Dubai. What we see here seems to be an outcome of the global crash and not because we were over-building; or over pricing in Dubai etc. If the situation in the world was honky dory and we were struggling here – I would surrender, but that’s not the case here as I see it.
As for the 41% of prices going down – I assume we talk about the drop of the ‘selling price’ from the peak back in 2008? At this point in time I am not sure how much of that is the actual value of the properties and how much is contributed to the fact that one cannot get a loan. If the banks offer loans at say 4-5% interest with 5-10% deposit I would think that there would be a few more buyers around. I certainly would be. I just don’t have the money at the moment to buy a few of those apartments even at the risk that the price goes further down.
I am personally very interested to see what happens in May / June / July and to the end of this year. I am interested to see what happens to those who paid apartment say 3 million and now have no money to pay mortgage due to rent price falls (assuming they relied on full rent)? If the guy still owes 2.8M to the bank and bank takes the property I wouldn’t expect the bank to sell it below 2.8M so I cannot see how those properties will go below that price? Unless banks decide to sell it for any price – and that would be good for those waiting with some money left to invest.
I.e., in the first year the guy gets AED 300,000 for rent and he pays the loan. This year he cannot sustain it – he offers it to the tenant for AED 250,000, gets the cheque and cash it in and then runs away leaving the property with the bank (like the cars at the airport). What happens next I am really interested to see.
I rent an apartment for AED 200,000 in JBR. I have no problem if my tenant goes and finds something cheaper. I am fairly positive I’ll find someone to fill in for more money. Born optimistic. Dubai apartments and emirates flights are still half full.
I think you are on the right track re: the reasons why the dubai property market has declined i.e. the global economy for anyone who can't connect the dots.
but I would change what you said slightly and attribute PART of the current situation to over-speculation.
Apr 29th 2009, 11:13 am
#13
ex-expat
Joined: Nov 2008
Location: in front of my computer - in sunny Sussex!
Posts: 2,162
Re: Dubai house price crash - 41% in Q1 2009
Over-speculation was part of the "strategy"... as is basing your economy on property and tourism, both of which are great when the cash is flowing, but the first things to go when it's not.
Apr 29th 2009, 11:55 am
#14
Account Closed
Joined: Oct 2008
Posts: 2,502
Re: Dubai house price crash - 41% in Q1 2009
What's your justification for claiming that the economy elsewhere (UK, Australia and the US) is in worse conditions than out here?
Unemployment? Well, the US is at 8% and climbing, but I bet it's probably now higher in Dubai. Or perhaps since most of the unemployed leave the country, it isn't factored into the official unemployed figures?
Housing price declines? Prices have dropped 50% in Dubai already. That's far worse than in the UK or the US. House prices there have decidedly not dropped 50%. For most markets the decline is around 25-30%, and now the first state to be badly hit, California, is seeing home sales increase.
As Kitty pointed out, Dubai's economic strategy was closely tied to property speculation and the continued growth of the property boom. I saw estimations that close to half of the Dubai GDP was dependent on the property sector. That means Dubai is hardly a diversified economy and this country is a classic example of putting so many eggs into one basket out of greed. That basket has completely unraveled, and it may be years, even decades, before prices reach the 2008 level. After all, one only has to look at Japan and Taiwan to see places where property prices are still below their 1989 peak values at the height of the Japanese real estate boom.
Well, first of all I tend to think that everyone likes to point their finger to Dubai and price fall because they don’t want to think about the situation at home. The situation in UK / USA / Australia is at least the same if not worse than here. I bought an apartment in Perth 2 years back – off plan and cannot sell it for the price I paid 2 years ago. I can still sell my apartment in Dubai for a better price than I paid 2 years ago.
I remember the topic about the ‘bubble burst’ and discussions we had back then. However, my perception was that everyone was saying that the bubble would burst because of un-sustainability of such fast pace development lack of economy basis, etc. etc. There was no mentioning of the world economy going down the toilet and pulling Dubai together with it.
I don’t think that ‘bubble burst’ as discussed on this forum ever happened in Dubai. What we see here seems to be an outcome of the global crash and not because we were over-building; or over pricing in Dubai etc. If the situation in the world was honky dory and we were struggling here – I would surrender, but that’s not the case here as I see it.
As for the 41% of prices going down – I assume we talk about the drop of the ‘selling price’ from the peak back in 2008? At this point in time I am not sure how much of that is the actual value of the properties and how much is contributed to the fact that one cannot get a loan. If the banks offer loans at say 4-5% interest with 5-10% deposit I would think that there would be a few more buyers around. I certainly would be. I just don’t have the money at the moment to buy a few of those apartments even at the risk that the price goes further down.
I am personally very interested to see what happens in May / June / July and to the end of this year. I am interested to see what happens to those who paid apartment say 3 million and now have no money to pay mortgage due to rent price falls (assuming they relied on full rent)? If the guy still owes 2.8M to the bank and bank takes the property I wouldn’t expect the bank to sell it below 2.8M so I cannot see how those properties will go below that price? Unless banks decide to sell it for any price – and that would be good for those waiting with some money left to invest.
I.e., in the first year the guy gets AED 300,000 for rent and he pays the loan. This year he cannot sustain it – he offers it to the tenant for AED 250,000, gets the cheque and cash it in and then runs away leaving the property with the bank (like the cars at the airport). What happens next I am really interested to see.
I rent an apartment for AED 200,000 in JBR. I have no problem if my tenant goes and finds something cheaper. I am fairly positive I’ll find someone to fill in for more money. Born optimistic. Dubai apartments and emirates flights are still half full.
Unemployment? Well, the US is at 8% and climbing, but I bet it's probably now higher in Dubai. Or perhaps since most of the unemployed leave the country, it isn't factored into the official unemployed figures?
Housing price declines? Prices have dropped 50% in Dubai already. That's far worse than in the UK or the US. House prices there have decidedly not dropped 50%. For most markets the decline is around 25-30%, and now the first state to be badly hit, California, is seeing home sales increase.
As Kitty pointed out, Dubai's economic strategy was closely tied to property speculation and the continued growth of the property boom. I saw estimations that close to half of the Dubai GDP was dependent on the property sector. That means Dubai is hardly a diversified economy and this country is a classic example of putting so many eggs into one basket out of greed. That basket has completely unraveled, and it may be years, even decades, before prices reach the 2008 level. After all, one only has to look at Japan and Taiwan to see places where property prices are still below their 1989 peak values at the height of the Japanese real estate boom.
Well, first of all I tend to think that everyone likes to point their finger to Dubai and price fall because they don’t want to think about the situation at home. The situation in UK / USA / Australia is at least the same if not worse than here. I bought an apartment in Perth 2 years back – off plan and cannot sell it for the price I paid 2 years ago. I can still sell my apartment in Dubai for a better price than I paid 2 years ago.
I remember the topic about the ‘bubble burst’ and discussions we had back then. However, my perception was that everyone was saying that the bubble would burst because of un-sustainability of such fast pace development lack of economy basis, etc. etc. There was no mentioning of the world economy going down the toilet and pulling Dubai together with it.
I don’t think that ‘bubble burst’ as discussed on this forum ever happened in Dubai. What we see here seems to be an outcome of the global crash and not because we were over-building; or over pricing in Dubai etc. If the situation in the world was honky dory and we were struggling here – I would surrender, but that’s not the case here as I see it.
As for the 41% of prices going down – I assume we talk about the drop of the ‘selling price’ from the peak back in 2008? At this point in time I am not sure how much of that is the actual value of the properties and how much is contributed to the fact that one cannot get a loan. If the banks offer loans at say 4-5% interest with 5-10% deposit I would think that there would be a few more buyers around. I certainly would be. I just don’t have the money at the moment to buy a few of those apartments even at the risk that the price goes further down.
I am personally very interested to see what happens in May / June / July and to the end of this year. I am interested to see what happens to those who paid apartment say 3 million and now have no money to pay mortgage due to rent price falls (assuming they relied on full rent)? If the guy still owes 2.8M to the bank and bank takes the property I wouldn’t expect the bank to sell it below 2.8M so I cannot see how those properties will go below that price? Unless banks decide to sell it for any price – and that would be good for those waiting with some money left to invest.
I.e., in the first year the guy gets AED 300,000 for rent and he pays the loan. This year he cannot sustain it – he offers it to the tenant for AED 250,000, gets the cheque and cash it in and then runs away leaving the property with the bank (like the cars at the airport). What happens next I am really interested to see.
I rent an apartment for AED 200,000 in JBR. I have no problem if my tenant goes and finds something cheaper. I am fairly positive I’ll find someone to fill in for more money. Born optimistic. Dubai apartments and emirates flights are still half full.
Apr 29th 2009, 3:18 pm
#15
Concierge
Joined: Feb 2007
Posts: 29,625
Re: Dubai house price crash - 41% in Q1 2009
I rent an apartment for AED 200,000 in JBR. I have no problem if my tenant goes and finds something cheaper. I am fairly positive I’ll find someone to fill in for more money. Born optimistic. Dubai apartments and emirates flights are still half full.
is this the 4 bed place that you expect to rent for 200k?
is this the 4 bed place that you expect to rent for 200k?