If there was a property crash in Dubai..
Feb 26th 2007, 4:31 am
#76
Lost in BE Cyberspace
Joined: Dec 2006
Posts: 23,434
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.
Feb 26th 2007, 4:39 am
#77
Guest
Posts: n/a
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.
Feb 26th 2007, 4:50 am
#78
Up in the air
Thread Starter
Joined: Oct 2004
Location: I'm global baby!!!!!!
Posts: 7,263
Re: If there was a property crash in Dubai..
Panic selling will push prices lower. The shady people who bought floors at a time to "wash their cash" will sell at any price to release clean funds.
On top of that, add the thousands of apartments coming online within the next quarter.
The fact that property inflation is high and unsustainable is a factor which may cause the correction.....but there are MANY factors which will make matter worse(better) once the ball starts rolling
Feb 26th 2007, 4:54 am
#79
Lost in BE Cyberspace
Joined: Dec 2006
Posts: 23,434
Re: If there was a property crash in Dubai..
I honestly believe the "correction" will be larger than what has been discussed.
Panic selling will push prices lower. The shady people who bought floors at a time to "wash their cash" will sell at any price to release clean funds.
On top of that, add the thousands of apartments coming online within the next quarter.
The fact that property inflation is high and unsustainable is a factor which may cause the correction.....but there are MANY factors which will make matter worse(better) once the ball starts rolling
Panic selling will push prices lower. The shady people who bought floors at a time to "wash their cash" will sell at any price to release clean funds.
On top of that, add the thousands of apartments coming online within the next quarter.
The fact that property inflation is high and unsustainable is a factor which may cause the correction.....but there are MANY factors which will make matter worse(better) once the ball starts rolling
UAE lingo:
Interest=Profit
Tax=Fees
Crash=Correction
Feb 26th 2007, 10:31 am
#80
Lost in BE Cyberspace
Joined: Jan 2007
Location: By the old canal...
Posts: 7,715
A load of hot air....
Dinner party gossipers a few months back were whispering about the "City in the Air" project... Not content with an underwater hotel, some developer had come up with the idea of using super-zeppelin airships to have a flying tower block...
If prices crashed in Dubai, you could always fly your apartment block to downtown Sofia or Baku or wherever the next boom was happening, and see your investment soar.....
On a more serious note, if there is over-supply of property, why are we not starting to see rents coming down? Perhaps this will only happen when the current projects complete construction - it seems that demand for rental properties is still out-stripping supply (particularly as so few expats are inclined to buy a property at the moment!)
If prices crashed in Dubai, you could always fly your apartment block to downtown Sofia or Baku or wherever the next boom was happening, and see your investment soar.....
On a more serious note, if there is over-supply of property, why are we not starting to see rents coming down? Perhaps this will only happen when the current projects complete construction - it seems that demand for rental properties is still out-stripping supply (particularly as so few expats are inclined to buy a property at the moment!)
Feb 26th 2007, 10:59 am
#81
Guest
Posts: n/a
Re: If there was a property crash in Dubai..
1, the shortage is being kept artificially high by speculators not releasing blocks (eg - half of the marina is empty and not for rent)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
Feb 26th 2007, 1:13 pm
#82
Banned (Always Correct)
Joined: Aug 2004
Posts: 941
Re: If there was a property crash in Dubai..
1, the shortage is being kept artificially high by speculators not releasing blocks (eg - half of the marina is empty and not for rent)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
Feb 26th 2007, 4:15 pm
#83
BE Enthusiast
Joined: Jan 2005
Location: Dubai
Posts: 888
Re: If there was a property crash in Dubai..
1, the shortage is being kept artificially high by speculators not releasing blocks (eg - half of the marina is empty and not for rent)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
2, The delay in project completion is hitting supply. However, by July 2007 there 'should' be thousands more units on the market. Proper oversupply should happen by the end of the year (although it is not beyond the realms of possibility that the Palm, int city or JBR won't be ready by then)
JBR will certainly be finished by the end of the year, I don't know about the others.
Feb 26th 2007, 4:18 pm
#84
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Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: If there was a property crash in Dubai..
The apartment owners were also in for a rude shock with regard to maintenance fees being socked by Nakheel - (about Aed 17.3 per sft and this is just the beginning.....) and does not even include the cost of using the club facilities. So about Aed 35 k for a 2 bed apartment. And the municipality haven't even got around to collecting their dues yet
Feb 26th 2007, 4:23 pm
#85
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Joined: Jan 2005
Location: Dubai
Posts: 888
Re: If there was a property crash in Dubai..
The apartment owners were also in for a rude shock with regard to maintenance fees being socked by Nakheel - (about Aed 17.3 per sft and this is just the beginning.....) and does not even include the cost of using the club facilities. So about Aed 35 k for a 2 bed apartment. And the municipality haven't even got around to collecting their dues yet
Feb 26th 2007, 4:34 pm
#86
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Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: If there was a property crash in Dubai..
10 month charges:
Owners AssociationAnnual Expenditure Fund : Aed 12,135.00
Owners AssociationCapital Reserve Fund: Aed 3,895.00
Master CommunityAnnual Expenditure Fund: Aed 3,055.00
Master CommunityCapital Reserve Fund: Aed 3,055.00
Feb 27th 2007, 1:16 pm
#87
MODERATOR
Joined: Dec 2004
Location: Dubai
Posts: 6,370
Re: If there was a property crash in Dubai..
Yes confirmed news. One of the apartment owners just got his first bill (apartment size 1496 sft).
10 month charges:
Owners AssociationAnnual Expenditure Fund : Aed 12,135.00
Owners AssociationCapital Reserve Fund: Aed 3,895.00
Master CommunityAnnual Expenditure Fund: Aed 3,055.00
Master CommunityCapital Reserve Fund: Aed 3,055.00
10 month charges:
Owners AssociationAnnual Expenditure Fund : Aed 12,135.00
Owners AssociationCapital Reserve Fund: Aed 3,895.00
Master CommunityAnnual Expenditure Fund: Aed 3,055.00
Master CommunityCapital Reserve Fund: Aed 3,055.00
I just remember a client who choose to 'invest' in his own home here instead of taking an investment which would have made him around 12% a year because their was a 1% management fee for the first five years...hehehe.
Oh well, there's no place like home!
Feb 27th 2007, 1:34 pm
#88
Lost in BE Cyberspace
Joined: Jan 2007
Location: By the old canal...
Posts: 7,715
Re: If there was a property crash in Dubai..
Yes confirmed news. One of the apartment owners just got his first bill (apartment size 1496 sft).
10 month charges:
Owners AssociationAnnual Expenditure Fund : Aed 12,135.00
Owners AssociationCapital Reserve Fund: Aed 3,895.00
Master CommunityAnnual Expenditure Fund: Aed 3,055.00
Master CommunityCapital Reserve Fund: Aed 3,055.00
10 month charges:
Owners AssociationAnnual Expenditure Fund : Aed 12,135.00
Owners AssociationCapital Reserve Fund: Aed 3,895.00
Master CommunityAnnual Expenditure Fund: Aed 3,055.00
Master CommunityCapital Reserve Fund: Aed 3,055.00
Also, what about the Abu Dhabi market? Seems like even tho the property market has only just opened up to expats, the entry level prices are on a par with Dubai... So Abu D goes straight into a bust without ever having had a boom??
Feb 27th 2007, 2:40 pm
#89
Up in the air
Thread Starter
Joined: Oct 2004
Location: I'm global baby!!!!!!
Posts: 7,263
Re: If there was a property crash in Dubai..
Hmm. So Emar, Nakheel et al are exporting the same "business model" to Karachi, Delhi and Bombay??? D'ya think similar scams will ensue there?
Also, what about the Abu Dhabi market? Seems like even tho the property market has only just opened up to expats, the entry level prices are on a par with Dubai... So Abu D goes straight into a bust without ever having had a boom??
Also, what about the Abu Dhabi market? Seems like even tho the property market has only just opened up to expats, the entry level prices are on a par with Dubai... So Abu D goes straight into a bust without ever having had a boom??
They want cheaper low end sales to bolster the market...not sure if that will work really, but im not an expert.
anyone??
Feb 27th 2007, 2:51 pm
#90
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Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: If there was a property crash in Dubai..
According to today's newspapers, alot of developers are now focusing on mid-low range housing in order to ensure more people are viable prospects to purchase.
They want cheaper low end sales to bolster the market...not sure if that will work really, but im not an expert.
anyone??
They want cheaper low end sales to bolster the market...not sure if that will work really, but im not an expert.
anyone??
I am having images of Eyore's house in Winnie the Pooh
