If there was a property crash in Dubai..
#61
Re: If there was a property crash in Dubai..
Emaar knows if they don't sell their stock at the asking price NOW, they cannot expect it in the future. They expect prices to fall........
Now lets see how many they manage to sell and at what price.
#62
Re: If there was a property crash in Dubai..
There is an interesting article in this weeks Tinme Out on rentals...be interesting to see if their promises come to fruition.
We just renewed our contract and landlord did not ask for any increase for this year, I was astounded.
We just renewed our contract and landlord did not ask for any increase for this year, I was astounded.
#63
Re: If there was a property crash in Dubai..
He is smart - he is building up some goodwill and hoping you won't negotiate the rent down, this time next year
#65
Soupy twist
Joined: Dec 2004
Posts: 2,271
Re: If there was a property crash in Dubai..
Much as I enjoy any news that helps corroborate that a property crash is coming, could it not be that Emaar simply don't want the hassle of being landlords any more?
#66
Re: If there was a property crash in Dubai..
What is the hassle of being a landlord where Emmar is concerned?
#67
Re: If there was a property crash in Dubai..
Emaar are developers, not landlords. Because of the rent cap they are unable to get a sensible return on the properties they own so they might as well sell them and do what they do best- use the money to build some more. I don't think this is the start of a price crash at all but they are probably aware that prices have finished doubling every couple of years.
#68
Re: If there was a property crash in Dubai..
Exactly - so why should people invest knowing very well that the reason Emaar is selling is because there are no sensible returns to be made? I did not say crash, but a significant correction - definitely. Lets see
#69
Soupy twist
Joined: Dec 2004
Posts: 2,271
Re: If there was a property crash in Dubai..
Define "sensible return". The Lakes was completed a number of years ago, and because the Dubai property boom hadn't yet begun, it cost a lot less to build than a similar development would today. Whatever they are charging tenants now, they will be making a handsome return.
#70
Re: If there was a property crash in Dubai..
It doesn't matter what it cost them to build three years ago, it only matters what it is worth now and what else they could do with the money. I'm sure they are making money based on what it cost them to build, but if they sold up now and just banked the money they would get a better return than renting the places out. I suspect they want to release the capital to invest in a development elsewhere which will give them a better return- they hope.
#71
Guest
Posts: n/a
Re: If there was a property crash in Dubai..
Emaar are developers, not landlords. Because of the rent cap they are unable to get a sensible return on the properties they own so they might as well sell them and do what they do best- use the money to build some more. I don't think this is the start of a price crash at all but they are probably aware that prices have finished doubling every couple of years.
1, Emaar does have a separate rental division, and of course owns Emril, which is to all intensive purposes a rentals maintenance company
2, Emaar was never making a fortune on the Lakes or the Greens, it didn't put prices up by 40% last year
3, There is a big difference between the prices being quoted on the market and the prices actually being paid. See how many tenants decided to buy at the Greens at the prices offered (Dh950,000 for a 1 bed). I think it was actually zero. You think open market investors will shell out such money for entire buildings? The short term notice of the deal, the aggressive nature of the pitch, the price and the pressure being put on the tenants smacks of a fire sale.
#72
Guest
Posts: n/a
Re: If there was a property crash in Dubai..
It doesn't matter what it cost them to build three years ago, it only matters what it is worth now and what else they could do with the money. I'm sure they are making money based on what it cost them to build, but if they sold up now and just banked the money they would get a better return than renting the places out. I suspect they want to release the capital to invest in a development elsewhere which will give them a better return- they hope.
#73
Re: If there was a property crash in Dubai..
I hear people are already making noises about the silly price (~ 1200 psft) at The Lakes (4 year old, 'iffy' fittings, cracked walls.......). So let's see how many buy this one.
#74
Re: If there was a property crash in Dubai..
Lakes tenants now been told that villas are going up on market. Was out with friend last night who will be moving - 2.8 million dh for a 3 bedroom villa does not make sense!
#75
Re: If there was a property crash in Dubai..
i was talking to a guy yesterday who's fairly high up in a major saudi investment group, he said that "the bubble" had already burst and that certain developers with 10-25 towers under construction are basically being bank-rolled by the government - hence the offer of a free private jet limited to 700 buyers!
If you think about it, the cost of a building is now 15% of the total price/value of the building. That's upto 85% profit.
Suely, if the developers were less greedy, then they could easily sell at a third of the price, and still make 100% ROI. But the government doesn't want that as it would show a fundemental weakness in the economy, killing off a lot of the foreign companies investments etc.
If you think about it, the cost of a building is now 15% of the total price/value of the building. That's upto 85% profit.
Suely, if the developers were less greedy, then they could easily sell at a third of the price, and still make 100% ROI. But the government doesn't want that as it would show a fundemental weakness in the economy, killing off a lot of the foreign companies investments etc.