Jammy_Dodgers

Indeed, Ikea and MFI furniture is more sturdy than most of Dubai's constructions.

littlejimmy

And in the news today, Tamweel have announced that there will be a delay to the delivery of 18,000 units expected to be released this year.

Jammy_Dodgers

now there's a shocker....

IndieG

Could it be that they are doing so on purpose - choking supply and artifically holding up prices as long as possible?

The downside is that they will kill all future investments in new projects - they have already lost a lot of trust. People are still not complaining too much about the delay because they are happy with the price increases.

Eeyore

Because there isn't an oversupply - *yet*. That's what we've been saying previously in this thread; once the current projects (most of which are years behind schedule) finally complete, there's going to be a supply overhang, at least for apartments. Most independent analysts are predicting 2008 for that.

The stuff about the service charges at JBR is interesting. A friend of ours went to a business presentation last year held by a British investment company, whose view was that off-plan villas are still a worthwhile investment buy, but apartments are not. They dealt specifically with JBR, pointing out that investors who bought 2- and 3-bed apartments at JBR are going to be expecting to charge in the region of 13,000 dhs per month in rent in order to cover their mortgage and service charges; this company doesn't believe that rents that high are going to be remotely realistic - by the time JBR opens properly, Dubai will be a renter's market.

They predict that a lot of investors are either going to have to fund a significant chunk of their monthly mortgage payment themselves, or simply sell in order to be rid of what's going to turn out to be a poor investment.

Eeyore

Artificial manipulation of the market to make things look better than they actually are? In Dubai? Never!

As we said earlier, though, they can't put off completing these projects forever... eventually the lateness of delivery starts reflecting badly on Dubai in the wider world. There is inevitably going to be a price correction, they might as well get on and let it happen.

IndieG

A lot of banks will take huge hits if real estate prices crumble - especially smaller banks like RAKBANK who have a very large exposure to this sector.

Jammy_Dodgers

Lets hope you dont work for RakBank then eh?!

IndieG

Nah.......

Jammy_Dodgers

National bank of Umm Al Qaiwain???

IndieG

Considering I don't post during the day it is one of the better employers

So, no, I am not with the Bank of RAK, Fujeirah, UAQ, Abu D.........

Border Reiver

Have the service charges for JBR been announced yet then? I wouldn't have thought 13,000Dhs for a 3 bed apartment there isn't and won't be out of the question. Mind you, I haven't seen the apartments....

What was the name of the "British Investment Company?"

littlejimmy

If it's HSBC I might have to come round and throw rotten fruit at you.

Eeyore

I thought they had, but I misread one of the earlier posts in this thread, one about the Palm Jumeirah.

But that's the whole point being made! Plenty of investors will be forced to ask that kind of rent due to the amount of mortgage debt they're carrying, but they'll have trouble getting tenants willing to pay it. Far too many investors here rushed to buy at any price, without stopping to consider what was going to happen to values once supply stopped lagging behind demand. More fool them.

I'll find out and get back to you. You've got property here that you rent out, don't you? Or am I thinking of someone else?

shakh your bootie

Eeyore's pad is a dream palace compared to the concentration camps where the "construction workers" who build all these developments live!!

[IMG]www.dubaiworkers.org/004.jpg[/IMG]

Human Rights Watch has officially declared this as an abuse of human rights...

To be fair, I met a guy from the UK Health & Safety exec a couple of months back, who told me that the UAE gov had appointed the UK HSE as consultants in drafting and implementing the equivalent of the UK Health & Safety at work act...

If any of you bears of little brain are interested, check out:

www.dubaiworkers.org

hrw.org/mideast/uae.php