Serious concern about UAE Property Market

[georgihh]

Originally Posted by DoBuy

How do you know that?No-one seems to have figures for how many people are moving to Dubai.There are alot of properties empty looking for tenants.

The demand dictates the market (rental).
Ok some buildings are empty in Dubai marina or JBR but not many can afford to pay 120000 DHS for one bedroom.
Look at International city – 50000 people moved in last year and the place is almost fully occupied
Now they are going to demolish Satwa – Where the people will go – Nowhere
Or they will pay double rent?
I think they will pay double rent
Have you bought in Dubai?
How many land registrations have you done % from your purchase.
This is going to be the new movement in Dubai no land registration – no resale or cant even rent out
In this case 80% of the properties are not real.

[DoBuy]

Originally Posted by georgihh

The demand dictates the market (rental).
Ok some buildings are empty in Dubai marina or JBR but not many can afford to pay 120000 DHS for one bedroom.
Look at International city – 50000 people moved in last year and the place is almost fully occupied
Now they are going to demolish Satwa – Where the people will go – Nowhere
Or they will pay double rent?
I think they will pay double rent
Have you bought in Dubai?
How many land registrations have you done % from your purchase.
This is going to be the new movement in Dubai no land registration – no resale or cant even rent out
In this case 80% of the properties are not real.

If people cannot afford 120.000 for a 1 bed then they will have to reduce the price.This will then reduce the prices for other 1 beds in less desirable areas.
How can people in Satwa afford to pay double,they are on low income?

Regards land registration.Does this mean that from now on every property must be registered?How do I find out if my building is registered?

[petelles12]

The cost of 1 barrel of petrol is around 7 USD is Saudi Arabia. The selling price is 130 USD. In all sectors, 10 % net profit is excellent while in petrolioum case hundreds of billions of dollars are coming from the desert.

In the center of this wealth, we are discussing about how much this city can grow ? It was 1.5 million, is not it ? Every year they are going to buy hundreds of companies mostly to be managed from Dubai.

When you put some sugar on the ground, immediately ants will jump on that. In this city, with 130 USD petrol price, I believe many ants will be coming here. Collect as much as sugar before new ants. I hesitated and purchased from more expensive.

The only risk I am seeing that America/Israel - Iran clash. I believe that this is real risk, they are not role playing.

Kind Regards,

[fws]

Originally Posted by Investoman_uae

Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?

I just need to hear their views about whats goin on with contractors in this market.

Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.

When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.

The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.

Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.

If they cant, then they will delay it until they can afford it or get finance help from the banks.

Just wanted to share this concern in the market right now.

Inv.

I understand that this must be a major concern for many developers, but like investors they gambled. Many developers sold their units years ago, working on the principle that they could bank the money brought in by stage payments and make more money by delaying the projects. This has now gone spectacularly wrong as inflation, especially in construction costs, has risen phenomenally.

The reputable developers like Cayan, start their projects within a few months of first sales and accordingly are able to manage their finances better. Other developers like Damac started selling Ocean Heights back in early 2005 and have only just started building. The question is why?

Again, the Cayan project Infinity went spectacularly wrong when the marina wall collapsed yet Cayan have delayed payments and put back the date of completion rather than just not telling people when the development is going to finish, like so many developers in Dubai.

The rising building costs are a real cause for concern - especially for developers who have sold all the units years before completion. I just hope that many people do not come to lose their money as some developers fall by the wayside.

[vanityfair]

The doom and gloom being portrayed on this thread makes hard reading especially after investing in a studio in Sports City.
I still feel that is a long way for the Dubai property market to go.
Remember Dubai is still lagging behind all major commercial cities with the property values under half that of others. When there has been a long period of substained growth as in Dubai it is only natural to expect a downturn.

[DoBuy]

Developers falling by the wayside is a good thing for Dubai in the long run.Unfortunate for those who have given them money.There are too many shady and unprofessional developers and too many developments going on and threatning an oversupply.
Late starts on projects and rising material and labour costs all add to the delay of the price correction caused by oversupply that most are predicting for 2011/2012.
Personally I would like to see the Dubai goverment put a stop to all new launches as from now.
For all those who brought at least 6months to 1 year ago for projects that have been started,rising costs are a good thing.Prices per Sq Ft for new launches will have to be higher to allow for extra costs thus dragging up the prices of existing projects.
I didnt listen to the doom merchants a year ago when I brought a 1 bed,and now completed its worth around 60% more.
I read alot about all the people who are supposedly moving to dubai yet I don't see any official figures .The chronic shortage of office space is slowing down the influx of workers
which again will add to the threat of oversupply.

[Investoman_uae]

Ok, something positive for a change.

People will always want to live in Dubai. Even with the little issues it has. It is still a great city to live in, compared with other major cities of the world. It offers its residents something that is not offered elsewhere and thats luxury living, it comes as standard.

The Government need to sustain this growth by removing any obstacles out of the way. Its not difficult. They have the capabilties of solving any problems that come in the way.

For example, the Administration aspect, especially in the big companies. It needs to be more professional and efficient. They need better customer service, phone calls need to be answered, customer problems need to be solved. The buraucracy that is slowing things down need to be sorted out.

Also the Government need to bring more regulations, more control, more maturity to the market. People want their rights protected, whether in buying/selling transactions, or registration, etc... they need their investments protected and secured.

So this is how Dubai will sustain growth and development across the board. Not just Dubai, but all the Emirates need to enhance and innovate on all grounds.

Inv.

[DoBuy]

Originally Posted by Investoman_uae

For example, the Administration aspect, especially in the big companies. It needs to be more professional and efficient. They need better customer service, phone calls need to be answered, customer problems need to be solved. The buraucracy that is slowing things down need to be sorted out.
Inv.

This is a big problem in Dubai.They need more European workers in administrative positions.

[Roshan]

Originally Posted by DoBuy

If people cannot afford 120.000 for a 1 bed then they will have to reduce the price.This will then reduce the prices for other 1 beds in less desirable areas.
How can people in Satwa afford to pay double,they are on low income?

Regards land registration.Does this mean that from now on every property must be registered?How do I find out if my building is registered?

If the property is not registered you cannot call it yours. There were ads on the paper which clearly said that you cannot call it yours if you have not registered. In fact that's done when the developer hands over the property to the owner.

Regards

Roshan

[DoBuy]

Originally Posted by Roshan

If the property is not registered you cannot call it yours. There were ads on the paper which clearly said that you cannot call it yours if you have not registered. In fact that's done when the developer hands over the property to the owner.

Regards

Roshan

Isnt it the case that the developer registers the building as opposed to owners registering their own units? Plus this is done even if the building isnt complete?