The property apocalypse draws closer...
#62
Re: The property apocalypse draws closer...
I agree with what you say about high end apartments being a large sector of the market but there is a world of difference between a penthouse at (say) La Reve (I think that is correct?) and some of the so called luxury apartments you can see at the Marina.
#63
Soupy twist
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Joined: Dec 2004
Posts: 2,271
Re: The property apocalypse draws closer...
If it was that easy predicting what will happen all the experts would be busy making millions on the property market rather than writing reports
As W10 pointed out, when the UAE stock market crashed it was the individual investors who got shafted, because they'd ignored the warnings given by the analysts (or more likely, not bothered to research what the analysts were saying in the first place, but would probably have ignored it anyway because the official word from the UAE money men was "Everything's fine, no crash coming here!"). The sensible people, and/or the people with proper fund managers, took heed of the warnings and moved their money accordingly.
The Titanic was built by experts and Noah's Ark was built by amateurs. Go figure
I agree with what you say about high end apartments being a large sector of the market but there is a world of difference between a penthouse at (say) La Reve (I think that is correct?) and some of the so called luxury apartments you can see at the Marina
#64
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Joined: Oct 2006
Posts: 537
Re: The property apocalypse draws closer...
Not at all. I do think that when the likes of JBR come onto the market, there will be excess supply and prices/rents for apartments will fall in the short term. However, in the long run, and by that I mean 5+ years down the line, prices will show an upward trend.
For villas, however I think it is a different story and demand exceeds supply by a huge margin.
As for these so-called 'experts'.. well weren't they the same ones that predicted doom and gloom for the UK property market since the late 90s? And what has happened since?
And I remember the original professional predictions that the completion of the Springs, Meadows, Ranches etc will ease pressure on Jumeirah rentals.. could they have been any further from the truth!!
While I do admit I do have a desire to see the Dubai property market grow even stronger due to my stake in it, I can also see how your views are quite clouded. I would be bitter as well if my rent doubled and I was effectively paying off my landlord's mortgage and funding several luxury cruises a year for him, the family and the maid!
As for the stock market vs real estate...you cant quite flip shares the same way you can flip houses.
#65
Re: The property apocalypse draws closer...
One major development (sorry, I cannot provide any names) already sold fully to real estate agents who want to now pull out but are stuck (and who are incidentally continuing to promote it heavily!) has been abandoned and repossessed by the master developer. No finance for the development has been tied up yet. Before you ask - yes, this is first hand information....
Just be very careful with whom you deal - I would never buy off-plan nor would I advise paying the highly inflated prices (unless the sums are in your favour) for ready property.
PS - Expat brat:
My rents have not doubled, we use 34% of our rent allowance, and I certainly do not wish or hope for a crash - far from it!
Just be very careful with whom you deal - I would never buy off-plan nor would I advise paying the highly inflated prices (unless the sums are in your favour) for ready property.
PS - Expat brat:
My rents have not doubled, we use 34% of our rent allowance, and I certainly do not wish or hope for a crash - far from it!
Last edited by IndieG; Apr 29th 2007 at 6:30 pm.
#66
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Re: The property apocalypse draws closer...
Not at all. I do think that when the likes of JBR come onto the market, there will be excess supply and prices/rents for apartments will fall in the short term. However, in the long run, and by that I mean 5+ years down the line, prices will show an upward trend.
For villas, however I think it is a different story and demand exceeds supply by a huge margin.
As for these so-called 'experts'.. well weren't they the same ones that predicted doom and gloom for the UK property market since the late 90s? And what has happened since?
For villas, however I think it is a different story and demand exceeds supply by a huge margin.
As for these so-called 'experts'.. well weren't they the same ones that predicted doom and gloom for the UK property market since the late 90s? And what has happened since?
Dubai is a classic boom and bust economy, which is being propped up by the super-rich.
I think it will take more than JBR to bring prices down, but sometime in the next 18 months they will fall. Not as much as people think because there are still people with vested interests and enormous sums of cash who will keep apartments empty to maintain inflated prices. (much like they are doing now with the DFM, govt institutions accounted for probably 25% of the Air Arabia share sales because they knew an undersold IPO would be disasterous for the reputation of the market). I still say 30% will be the benchmark though.
#67
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Re: The property apocalypse draws closer...
They are experts expressing an opinion and I'm an amateur doing the same. If it was that easy predicting what will happen all the experts would be busy making millions on the property market rather than writing reports.
I agree with what you say about high end apartments being a large sector of the market but there is a world of difference between a penthouse at (say) La Reve (I think that is correct?) and some of the so called luxury apartments you can see at the Marina.
I agree with what you say about high end apartments being a large sector of the market but there is a world of difference between a penthouse at (say) La Reve (I think that is correct?) and some of the so called luxury apartments you can see at the Marina.
Isn't a 2 bed flat in Marina still (supposedly) selling for Dh2m...I'd say that was aimed at the luxury end of the market...
PS - for what its worth, I've been told Cape Town is where it's at in property terms. Still affordable, beautiful location, good healthcare, proper ownesrship rights, good retirement area. You can pick up a waterfront 2 bed for US250k...
#68
Soupy twist
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Joined: Dec 2004
Posts: 2,271
Re: The property apocalypse draws closer...
As for these so-called 'experts'.. well weren't they the same ones that predicted doom and gloom for the UK property market since the late 90s? And what has happened since?
Even the Bank of England has admitted that it made a mistake in engineering the cheap-money-driven property boom, and there *will* be a reckoning. Interest rates are still artificially low in the UK; the "normal" rate should be about 8-9%... which would crucify the property market. The BoE can stave it off for now, but not indefinitely.
I would be bitter as well if my rent doubled and I was effectively paying off my landlord's mortgage and funding several luxury cruises a year for him, the family and the maid!
As for the stock market vs real estate...you cant quite flip shares the same way you can flip houses.
But of course, you're missing the point. Canny investors (read : professional investors) took heed of the expert warnings that the stock market growth was unsustainable (and bloody hell, there were enough of them), and they got their money out in time. All it took them was a phone call. Private investors preferred to listen to the official blandishments that everything in the garden was rosy, and of course they paid a heavy price; I know several people (all private investors who thought they were onto a sure thing) who lost a lot of money when the market crashed, simply because they either didn't want to hear the warnings, or dismissed them as jealous scaremongering.
Last edited by Eeyore; Apr 29th 2007 at 7:07 pm.
#69
BE Enthusiast
Joined: Oct 2006
Posts: 537
Re: The property apocalypse draws closer...
One major development (sorry, I cannot provide any names) already sold fully to real estate agents who want to now pull out but are stuck (and who are incidentally continuing to promote it heavily!) has been abandoned and repossessed by the master developer. No finance for the development has been tied up yet. Before you ask - yes, this is first hand information....
Just be very careful with whom you deal - I would never buy off-plan nor would I advise paying the highly inflated prices (unless the sums are in your favour) for ready property.
PS - Expat brat:
My rents have not doubled, we use 34% of our rent allowance, and I certainly do not wish or hope for a crash - far from it!
Just be very careful with whom you deal - I would never buy off-plan nor would I advise paying the highly inflated prices (unless the sums are in your favour) for ready property.
PS - Expat brat:
My rents have not doubled, we use 34% of our rent allowance, and I certainly do not wish or hope for a crash - far from it!
At the end of the day, if you are looking to stay in the UAE for a good number of years and get a company housing allowance, it makes sense to look into buying property since your company is practically helping you to subsidise the mortgage.
One thing is for certain, the days of buying property on Monday and selling it 30% higher on Wednesday are well and truly over. But there are still some gains to be made if you invest very wisely and carefully.
#70
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Re: The property apocalypse draws closer...
What has happened since is that UK property values have been pushed up and up by the availability of cheap money and the extensive use of self-certification mortgages, which allowed people to lie about their incomes. The result has been that the amount of personal debt in the UK has rocketed, and a sizeable chunk of property owners are maxed out in respect of their monthly mortgage payments. They didn't think about the future, they assumed that interest rates would never rise, and they don't have any breathing space to absorb rate increases.
Even the Bank of England has admitted that it made a mistake in engineering the cheap-money-driven property boom, and there *will* be a reckoning. Interest rates are still artificially low in the UK; the "normal" rate should be about 8-9%... which would crucify the property market. The BoE can stave it off for now, but not indefinitely.
#71
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Re: The property apocalypse draws closer...
At current prices (and given the impending release of several thousand apartments) I would not buy, but my view might change a year or two down the line.
At the end of the day, if you are looking to stay in the UAE for a good number of years and get a company housing allowance, it makes sense to look into buying property since your company is practically helping you to subsidise the mortgage.
One thing is for certain, the days of buying property on Monday and selling it 30% higher on Wednesday are well and truly over. But there are still some gains to be made if you invest very wisely and carefully.
At the end of the day, if you are looking to stay in the UAE for a good number of years and get a company housing allowance, it makes sense to look into buying property since your company is practically helping you to subsidise the mortgage.
One thing is for certain, the days of buying property on Monday and selling it 30% higher on Wednesday are well and truly over. But there are still some gains to be made if you invest very wisely and carefully.
#73
Guest
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Re: The property apocalypse draws closer...
I don't know what BR is so tetchy about anyway...if the market falls 30% then there will still be a healthy profit on the original investment anyway.
PS - Anyone know if Emaar managed to sell any of the Lakes and the Greens yet?
PS - Anyone know if Emaar managed to sell any of the Lakes and the Greens yet?
#75
Soupy twist
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Joined: Dec 2004
Posts: 2,271
Re: The property apocalypse draws closer...
But the basic underlying problem remains; cheap money, self-cert mortgages and a more relaxed attitude to lending by the banks have led to a situation where a great many people have their income completely committed each month. The old "your mortgage should account for no more than 30% of your monthly outgoings" benchmark has been well and truly abandoned, with the result that too many people are walking a knife-edge; they can cope while interest rates stay as they are, but even a small rise will render their home unaffordable. And that's before you factor in credit card debt.
If the banks hadn't been so keen to throw money at people, the UK property market wouldn't be in the vulnerable state it is now - and it *is* vulnerable, simply because so many people are so heavily committed.