Rental Crash Part II

Old Jul 3rd 2010, 5:07 pm
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Default Rental Crash Part II

All right, so it's clear the final will be between Germany and the Netherlands, two of the worst countries in Europe, let's move back to a more relevant and local topic - the Dubai rental market collapse.

I present my latest evidence:

http://tnydu.biz/DfkzZu

(have no fear, it's the shortcut to Dubizzle posting link). For those who can't be bothered, it's a two-bed apartment on the Palm Jumeira asking 78K.

Having watched the market like a hawk and being mildly frustrated at the slow pace of rent declines (steady but slow) between January - May, suddenly we're seeing bigger drops throughout June and now July. The drops are becoming more drastic. Palm apartments particularly are 20% off from two months ago.

The Greens remains my #1 choice. Today I saw the biggest two-bed + useless study unit in one of the older Greens building, lots of light, good layout, roomy spaces. According to the agent who was the first agent I genuinely liked, the landlord is asking 85K in two cheques. When I was first looking in April, all those units were never to be seen asking under 110K. There are still desperate landlords asking 100K for much smaller 2-bed units in the Greens.

Almost signed the cheque right there on the spot, only the reminder that we're committed to our current villa till the end of August kept me from proceeding. That and the hopes that a 2 bed corner unit in the Fairways with golf course views could come down to 80-90K by the end of August.

Shall we start a bet - how much more will rental prices collapse? For how much longer? I now believe that it's very possible rents in July 2011 will be 50% of today market prices. But that will probably be the bottom point.
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Old Jul 3rd 2010, 5:29 pm
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Default Re: Rental Crash Part II

Evidence #2: three bed+ study in Al Reem, Arabian Ranches for 95,000. Millhouse, snap to attention!

http://tnydu.biz/Dfkzqn
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Old Jul 3rd 2010, 5:50 pm
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Default Re: Rental Crash Part II

But amazingly there are still optimists out there? I received an e-mail from an agent offering studios and 4 bed villas in some beachside complex in Jumairah 3. He was asking 80-124K for the studios and starting at 400k for the villas!!!

They must be very good or he has lost touch with reality?
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Old Jul 3rd 2010, 5:55 pm
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Default Re: Rental Crash Part II

Originally Posted by Jim Smith View Post
But amazingly there are still optimists out there? I received an e-mail from an agent offering studios and 4 bed villas in some beachside complex in Jumairah 3. He was asking 80-124K for the studios and starting at 400k for the villas!!!

They must be very good or he has lost touch with reality?
Eh. I think I know the complex. They were putting the finishing touches on two years ago. Place must still be near empty.

There are three new and goddamn ugly pink marble villas around the corner from my place in Umm Suqiem. The owner finished them early in 2009 and put them on the market with asking rent around 400K. Only one has been rented out since then. Guessing he's still asking 400k for the other two.
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Old Jul 3rd 2010, 6:40 pm
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Default Re: Rental Crash Part II

Originally Posted by Ethos83 View Post
Evidence #2: three bed+ study in Al Reem, Arabian Ranches for 95,000. Millhouse, snap to attention!

http://tnydu.biz/Dfkzqn
don't worry buddy. I'm watching.

We are currently torn between a Saheel 3 bed and a Reem 1E (I like the lake views)

I've seen the Saheels drop from 180k to 150k and I've only been watching for a month or so. I'm sure that we will end up in Reem where I have seen rents from from 165k to 135k...

I don't have to leave this place until September 9th so nicely in the middle of Ramadan-a-rent-crash-a-dingdong - can't wait. I do wonder where the bottom is, all I do know is that we are not there just yet - I do think a further 50% is a bit hopeful, although there are literally millions of more villas on the Emirates Road that look to be coming soon which cannot be helpful.
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Old Jul 3rd 2010, 6:41 pm
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Default Re: Rental Crash Part II

Originally Posted by EmiratesMillhouse View Post
don't worry buddy. I'm watching.

We are currently torn between a Saheel 3 bed and a Reem 1E (I like the lake views)

I've seen the Saheels drop from 180k to 150k and I've only been watching for a month or so. I'm sure that we will end up in Reem where I have seen rents from from 165k to 135k...

I don't have to leave this place until September 9th so nicely in the middle of Ramadan-a-rent-crash-a-dingdong - can't wait. I do wonder where the bottom is, all I do know is that we are not there just yet - I do think a further 50% is a bit hopeful, although there are literally millions of more villas on the Emirates Road that look to be coming soon which cannot be helpful.
will the lake last though or will it be filled in?
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Old Jul 3rd 2010, 6:48 pm
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Default Re: Rental Crash Part II

This is hopeful...

We viewed a 4/5 bed podium villa in business bay towers - the villas are literally amazing and huge and come complete with close up panoramic views of... the SZR and a dust bowl stalled building site... asking price 250k.

I laughed and said ...'hummm a little out of our budget, it is negotiable?'

No was the answer.

I then asked, how full are the main towers? The reply... 'doing really well, we are nearly 40% let up'.

I smiled, wished him luck and left.
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Old Jul 3rd 2010, 6:51 pm
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Default Re: Rental Crash Part II

Originally Posted by commander View Post
will the lake last though or will it be filled in?
Well they filled in the Alma one so who knows - Anyway, I'm renting it, not buying it. I doubt that they are going to fill it in and build more villas when they have bugger all cash and falling occupancy rates though.
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Old Jul 4th 2010, 3:43 am
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Default Re: Rental Crash Part II

Originally Posted by EmiratesMillhouse View Post
Well they filled in the Alma one so who knows - Anyway, I'm renting it, not buying it. I doubt that they are going to fill it in and build more villas when they have bugger all cash and falling occupancy rates though.
true..good luck
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Old Jul 4th 2010, 4:24 am
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Default Re: Rental Crash Part II

Originally Posted by commander View Post
true..good luck
The thing that worries me more (and this applies to all compounds really) is that as rents falls landlords will stop paying the service charges. I'm sure that it is only a matter of time before the greenery dies, the pools turn green and the roaches move in.
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Old Jul 4th 2010, 5:03 am
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Default Re: Rental Crash Part II

That is one of my concern. I don't want to drop what is still a fairly steep amount of money on rent only to have the landlord bail out on the maintenance fees and have the place turn to crap. It's one of the reasons why I like the Greens, many of the apartments are owned by their initial buyers who will still be making a decent return after paying the maintenance fees.

Originally Posted by EmiratesMillhouse View Post
The thing that worries me more (and this applies to all compounds really) is that as rents falls landlords will stop paying the service charges. I'm sure that it is only a matter of time before the greenery dies, the pools turn green and the roaches move in.
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Old Jul 4th 2010, 5:04 am
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Default Re: Rental Crash Part II

A quick look at Dubizzle today: two listings for podium villas at or just under the 200K mark.

Originally Posted by EmiratesMillhouse View Post
This is hopeful...

We viewed a 4/5 bed podium villa in business bay towers - the villas are literally amazing and huge and come complete with close up panoramic views of... the SZR and a dust bowl stalled building site... asking price 250k.

I laughed and said ...'hummm a little out of our budget, it is negotiable?'

No was the answer.

I then asked, how full are the main towers? The reply... 'doing really well, we are nearly 40% let up'.

I smiled, wished him luck and left.
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Old Jul 4th 2010, 12:10 pm
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Default Re: Rental Crash Part II

do you think they will come down in AD also? we move there next year, thanks
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Old Jul 4th 2010, 4:47 pm
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Default Re: Rental Crash Part II

Originally Posted by mabsy View Post
do you think they will come down in AD also? we move there next year, thanks
they are coming down slightly, but no big decrease will be seen for at least 18 months - 2 years.
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Old Jul 4th 2010, 5:17 pm
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Default Re: Rental Crash Part II

Originally Posted by Grace O Malley View Post
they are coming down slightly, but no big decrease will be seen for at least 18 months - 2 years.
we negotiated the second payment (6 months) of our 1 bed apartment from 70k down to 50k, so maybe its a sign that they are starting to come down in AD
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