Joanna4

Hi, I'd like to ask for your opinions about the current state of matters on the Dubai property market. I've always dreamt about a property in Dubai, and now that I finally have the money, buying one no longer seems such a good idea. Still, a friend of mine says that the opening of Burj Khalifa is a great chance for Dubai 'rejuvenation' and that properties in Dubai are still a great investment! I do trust my friend, but I can also see the opinions are strongly divided. I'm no expert on the topic and therefore seek advice wherever possible. Thank you in advance!

Patsy Stoned

Is your friend an estate agent by any chance? I think it will take more than the Burj to rejuvenate Dubai, especially as it isn't open yet, they have serious issues with lift safety ( rebranding they are now calling it!! :-) )
Personally I wouldn't buy here.
If you have spare money invest elsewhere. Property in Spain/Cyprus is as cheap as chips right now. Just make sure you get the right permits

mission

i'd be interested to know what people have to say about this also...since i been toying with the idea of possibly buying a property over here too.

The Dean

Rearrange these words to form a well-known phrase or saying:

BARGE - TOUCH - DON'T - A - DISINFECTED - PROPERTY - POLE - WITH - DUBAI

Dubai's future, if it has one, depends on kick-starting the many tourism and leisure attractions that have ground to a halt (Dubailand, Bawardi, etc). That requires huge injections of fresh capital, which after the recent debt fiasco, just isn't going to be made available in sufficient quantities.

With little or no reason to be confident about Dubai's future, why would anyone buy here and thus sustain property prices?

To be fair, if you are going to be living in Dubai for a number of years, and therefore can afford to view buying simply as an alternative to renting, then it may have some merit, but as an investment, pure and simple? No.

BurpusMe

Few points worth considering...

High cost of ownership
Rental yields (if you want to be a landlord) or rental savings (if you're living in it) will be cut back by service fees, which start at around AED 35,000/an. Plus there is the high cost of mortgages in Dubai, which last I saw were 6-7% plus "fees". Then there is the obscene estate agent fees, which you will be paying.

Limited opportunity of capital gains
There is an absolute glut of units on the market, plus a massive supply coming online. This recession is young... do you really think we've hit the elusive "bottom" that people look for? (This could take years!) The local economy is on shaky ground, which does not help your resale value either. Property isn't exactly a "steal" like it was in 2002-2004.

Misc
What if VAT, capital gains or income tax is applied while you're holding property? Or a combination of all three!
An escalation of the Iran conflict could be disastrous for property values.
As would a series of building collapses due to poor construction standards.

Then again, I was wrong when I said some of the same things in 2002!
Good luck anyway.

expat.brat

It's worth remembering that a lot of people on here take an inherently gloomy approach to everything they do in life, so take their opinions with a pinch of salt and red hot chilli sauce.

If you are looking to buy a property for yourself and your family to live in for a good number of years, then there is a lot of potential in buying a villa here. They are still in short supply and that situation is unlikely to change for a number of years. If looking to buy a villa for investment purposes, rather than as an end user, yields aren't what they used to be, however there are some bargains to be had, especially if you can put a significant deposit in cash.

Apartments are another story, there are literally thousands of apartments hitting the market soon, and prices will go down even further.

Service charges are a lot cheaper for villas as there are fewer common areas. Emaar service fees start from as little as Dhs7200/year.

Avoid anything built by Nakheel because they are broke as ***** and in my opinion, they will jack up their service charges way above actual costs to bring in some money so they can pay back their debts.

Millhouse

also remember that there is no concept of maintenance here. Places literally fall to pieces in the midday sun.

Millhouse

Mission, if I were you I would do it - but leverage up as much as possible. Given your views on walking away on debts it's going to be a one way bet for you...

Ethos83

A director is moving into VH. He's paying 18 grand in common charges per year for a fairly average villa for the community. The Ranches isn't cheaper.

While villas are a safer investment for the time being, you have to factor in the long term build quality. Just take a drive through the Meadows to see villas built five years ago that are already decaying faster than a tower block on a Glasgow estate. Construction quality is shit across the board with, ironically, the exception of a number of Emaar apartment buildings. The build quality in Burj downtown is good.

DEWA is much cheaper for flats than for villas, even for comparable square footages. People in the Ranches and Springs got hit with 5+ grand DEWA bills last summer with no real explanations, while apartment bills are rarely above a grand. Most of us assume DEWA is deliberately targeting New Dubai with artificially inflated bills to recoup some of their debts, because dewa bills in the older expat faves of Jumeira and Umm Suqeim remained constant.

Patsy Stoned

It is also worth remembering that a lot of people on here take an inhererently realistic approach to everything they do in life, so take their opinions on board for consideration.

Bungdit Din

if he/she reckons that Dubai is going to get back to the way it was pre-crash in mid-2008, he/she is on another planet... construction companies here are still firing people, banks are still in the sh1t... if you "dreamed" about owning property in Dubai because of the returns that were happening during the 2005-2008 bubble, forget it. there are 000s of people who believed all the cr@p about Dubai being so rich it wouldn't be affected by the recession/credit crunch, bought at the peak in 2008 & are going to be in negative equity for years and years, maybe decades... and the Dubai property market was meant to be this amazing thing that was different to anywhere else in the world and could never ever fall... f***ing mugs.

BurpusMe

I don't mean to come off negative.

Dubai and UAE have a bright and productive future ahead of them - but it won't be another gigantic asset bubble as was the case of the mid 00's. And I also don't think the 00's bubble has fully deflated yet. Lot's of unwinding still to be done.

lionheart

Dubai property is still about 20% over-priced in my view. Better to buy something in the UK or wherever your home happens to be.

spart

Yeah..there was lots of positivity in your advice.

Some of us live in the real world, have not been paid, had to retrench staff, lay off mates, and hear sob stories from good people.

I for one, really have lost a lot of faith in the people of this country, who when it suits, disappear from proceedings and just put up a wall. Don't pay bills, don't answer calls, ignore letters. Wonderful if you are 16 and trying to avoid an unpleasant situation, but when you are responsible for running a company, its just mind boggling.

spart

You going to pay for that on credit...?