I can't speak for anyone else here but I like Dubai
I like the sun, the beach and the shopping malls and its nice walking around the port on a sunny day.
Its a good lifestyle, we feel safe to walk the streets and there are plenty of jobs and prospects.
I have friends in Dubai and there are loads of Russians and germans coming in and the chinese have a big stake in Dubai real estate now
I was a bit vigilant at first about dubai like everyone else here, but me and my wife are doing well
I can see why people here are concerned about the increasing prices in Dubai but if you buy in the right parts of Dubai and stick to the good developers you will be O.K.
Don't forget the planet is over populated so all the people will need somewhere to live

Nakheel curbs speculators
Bradley Hope

Last Updated: August 04. 2008 9:41PM UAE / August 4. 2008 5:41PM GMT

The Palm Jumeirah will be home to the Trump International Hotel & Tower, which is commanding some of the highest prices in Dubai. Pawan Singh / The National
ABU DHABI // Buyers at the Trump International Hotel & Tower on Palm Jumeirah will have to wait a year before they can sell their apartments on the secondary market, Nakheel officials said yesterday. The decision to restrict buyers at the sought after property is part of a growing wariness among major developers about high-speed speculation in the market.

Emaar, which is building the Burj Dubai, is one of the developers restricting secondary sales of its properties until buyers have paid 30 per cent of the cost. Others are setting up transfer fees that give buyers incentives to hold onto their apartments for longer.

“Doing this indicates that they recognise the problems at hand and how speculators have flipped their properties,” said Mary Nicola, an economist at Standard Chartered. Last week, Ms Nicola co-authored a study called Dubai – A tale of two housing markets, which called for new laws and a capital-gains tax to minimise speculation in the market.

The report uses the example of Las Vegas to illustrate the problems with markets that became overheated and eventually reversed. Las Vegas was a hotbed of investment starting in 2004, when an estimated 7,000 people were moving to the city every month. During 2005 and 2006, speculators stormed the market, sending prices soaring. But when the subprime problems emerged in the economy and the ensuing credit crisis hit, the property market collapsed.

“To this day, the housing market in Las Vegas is one of the hardest hit in the US,” the report said.

To the researchers, the clearest sign of speculation in Dubai is that buyers will pay more for a property from developers than from private sellers on the secondary market. This anomaly is because buyers need only a small downpayment when purchasing from the developer. On the secondary market buyers must take over the existing payment plan, and this requires a larger downpayment. Speculators want to put as little money down as possible, so will pay a higher price to buy from a developer.

This shows that many people want to buy apartments with very little money paid upfront – an option offered by developers and not by those on the secondary market. This is a key characteristic of speculative buying.

Another discrepancy is that off-plan properties are selling for the same price as a completed property; usually, a finished property commands a premium because a buyer can move in earlier or even let it out.

Anecdotal evidence is perhaps the most telling. At Cityscape Abu Dhabi this year, organisers reported that people were selling their places in line at property booths and tickets to the event for thousands of dirhams. And at property launches around Dubai, would-be buyers begin lining up the night before to compete with the crowds of people wanting apartments.

The Trump Tower, located on the trunk of Palm Jumeirah, is commanding some of the highest prices in Dubai. Of about 50 apartments sold during pre-sales, some reached as high as Dh12,000 (US$3,267) a square foot. Only Emaar’s Burj Dubai has had sales above those prices.

In addition to creating resale restrictions at some projects, Nakheel has also stipulated new rules for land sales. Buyers of plots of land cannot resell until they have completed their development within a certain amount of time.

Emaar also restricts resales of land plots. And all its buyers must now pay 30 per cent of the price – which usually takes one year under the current payment schedule – before they can resell their apartments.

An Emaar official said it was banks that shouldered the majority of the risk because they were funding the purchases and susceptible to fluctuations in the property market.

“Right now, the risk of speculation is mainly with the banks,” the official said. “That being said, we are certainly aware of it and making decisions to mitigate it where necessary.”

Union Properties, the developer behind MotorCity and UP Tower, now requires buyers to pay 20 per cent of the property value before reselling. In some cases, the company is implementing a transfer fee of as high as 10 per cent to cut back on speculative buyers.

Zaid Ghoul, the chief financial officer of Union Properties, said the market was undergoing changes to curb speculation.

“The mechanism of transfer fees will change with the new laws and regulations coming into effect to deal with this area,” he said. “Changing the payment schedule is not a common practice, but could happen based on market conditions.”

Still, Ms Nicola said action from developers alone would not be enough to prevent the growth of a speculative bubble in the property market.

“Control from the state is what is needed,” she said. “It would be difficult for individual developers to really control this.”

The fact that people are queueing up overnight is a classic sign of a bubble about to burst.

One well placed bomb and the whole Dubai property market will crash faster than a ZX81

This well placed bomb is more likely to be in London, NY or any other european city for that matter - before Dubai - not worried about that at all

The doommongers are missing the point - Dubai even in the last six months has had massive returns - in fact lot of properties have retruned as much as 70-80% since the start of the year.

I can vouch for this as I had bought 2 studio apartments in Jumerirah Lake Towers in January 08 each for around 550,000 AED 6 months before completion. Similar studios in the same tower are now fetching in the region of 950,000 AED on the resale market. There is no where else you are goin to find anywhere near these sort of gains that we have recently seen in Dubai, apart from Abu Dhabi and some other middle eastern cities. On top of all this the market is very liquid - and lot of investors are out there that are ready to buy these apartments with cash - no they are not the credit crunch stricken western europeans - they are by first and foremost Indians, followed by Saudia Arabians, Iranians, Russians and then the British.

The credit crunch will have a minimal effect on the middle eastern market as a lot of property is bought outright with cash and the financial institutions have v little or no exposure to the big US banks. To top this all the high oil price has created tremendous liquidity amongst the GCC investors and the sovereign wealth funds alike. Abu Dhabi has one of the highest income per capita in the whole world, much higher than US,UK,FRance Italy etc. And it has the largest soverign wealth fund as well (over 800 billion US dollar surplus). The dubai market is overheating but a crash will not happen - most possibly a correction in 2/3 years time.

Anyone who has bought even 6 months ago will be reaping the rewards as they have already made huge gains - a correction after 2 years may wipe out 20-30 percent which is nothing compared to the gains that have been made in the last 4/5 years - in some cases as much as 1000% ie 10 times. The prices have gone up so much because Dubai had been playing catch up with other well established cities and the importance of Dubai as the middle eastern hub for trade, finance and tourism had been realised

Investors/owners have already made theire money and the doommongers have been crying out for the last 4 years and they are the only ones who have miscalculated and hence missed out on the jackpot...

Yes quite correct in everything you have said Farrari
Prices will steady off a little in a few years time as the powers that be in Dubai introduce insentives to encourage people to hold the property longer term.
I wouldn't call it a bubble at all. I think it is good safe investment with good growth potential. It has proven track record.
The UK and USA only burst because the banks were throwing mortgages at any tom dick and harry who would default.
Real estate agents encouraging people to overspend over what they could afford and the economy couldn't handle the defecit.
For example I don't think you will see the national bank of Dubai going into the red like Northern Rock did!!!
Dubai is too well managed to end up in a stupid mess like the UK or USA
I think in 3 or 4 years time the projects will be finished and the city will be up and running efficiently.
The japanese have the contract for the metro train transport system being installed. When thats up and running it will add an extra ease to Dubai
As long as your sticking to the prestigious developers like Nakeel and MINC i think the property is fine in Dubai

Your one of them idiots that gets on a flight and says "theres a bomb on this plane" for a wind up


if it looks like a monkey, talks like a monkey and says stupid things like a monkey, it must be monkey

Batten down the hatches


Dubai stocks suffer worst fall in months
By Gaurav Ghose, Financial Features Editor
Published: August 10, 2008, 23:49


Dubai: The Dubai Financial Market General Index yesterday plummeted 2.97 per cent, its biggest one-day drop in six months, falling 155.75 points to 5,094.56. The Abu Dhabi Securities Exchange Index slid 121.56 points or 2.55 per cent to close at 4,652.42.

The market capitalisation fell by Dh21.67 billion on the day.

Fears over the sustainability of property price rise in the UAE and whether banks are going to restrict lending to the real estate sector weighed on in the minds of the investors.
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In Dubai, real estate stocks declined 3.98 per cent followed by the finance and investment sector, which lost 3.05 per cent. Though it had the highest turnover of Dh178.36 billion, Emaar Properties was one of the major losers, declining 3.83 per cent to Dh10.05. Arabtec led the list of decliners, plummeting 9.91 per cent to close at Dh15.45. Mortgage lender Tamweel dropped 4.41 per cent to Dh6.50.

In Abu Dhabi, Aldar Properties and Sorouh Real Estate, among the top three stocks in terms of turnover, retreated 7.39 per cent and 6.42 per cent respectively. Overall, the real estate sector index dropped 6.79 per cent.

Morgan Stanley last week issued a report warning property prices, particularly in Dubai, would come under pressure - it forecast a decline of 10 per cent - with an oversupply expected in 2009. Also, the Abu Dhabi Chamber of Commerce and Industry published a report saying that the banks should be careful in their exposure to real estate and construction sector to avoid the US scenario. Gulf News had reported on Sunday that the Central Bank could tighten lending standards to curb the rise in real estate sector loans.

"I think there was some very aggressive selling from the GCC investors in real estate," said Julian Bruce, director of foreign institutional sales, EFG-Hermes. "There are a few voices currently questioning the sustainability of property price rise in the UAE, Dubai in particular. In addition to the Morgan Stanley report, there is also speculation regarding a government legislation related to restriction of flipping on off-plan sales. Now obviously if you see domestic investors perceiving that their opportunity to make money in some of these markets is going to be restricted, then the financial reaction to that is to sell real estate stocks."

However, the market decline at this time of the year is similar to what happened during the period preceding Ramadan last year, according to Mousa Haddad, head of trade, discretionary mandate, National Bank of Abu Dhabi.

"So in the weeks before Ramadan we will see further declines. Volumes are getting lower, bids are declining - so basically there was pressure on the selling side - I would term it as 'panic selling. ' But the fact is that the fundamentals are very strong - for real estate, banks and telecom."

Among other factors, Bruce said, investors seemed to be shying away from emerging markets in general, and there was selling on Friday, the compulsion for which came from Russia. "A lot of investors investing in the Middle East and Northern Africa (Mena) region do have an exposure to Russia as well," he said.

Elsewhere in the region, the Tadawul index of Saudi Arabia fell to a new low for the year, closing 3.55 per cent lower at 7,884.14. Bahrain's index closed 0.82 per cent lower at 2,731.02. Qatar also declined 1.81 per cent to end at 11,297.86.

There is always a slowdown in property sale around the time of Ramadan in Duabi each year, plus it is summer there so its very hot at the moment, things will pick up towards the end of the year,

Dubai is one of the best investments in the world at the moment:

With the stock market suffering at the hands of inflation, weak dollar, rising price of oil, and the sub prime getting hit there is not many good investments left in the world except Dubai

Dubai residential sector to offer best returns this year


The boom in residential real estate sector is fuelled by population growth and rising salaries (PIA TORELLI)


By

Parag Deulgaonkar on Tuesday, August 12, 2008

Residential units in Dubai will offer the most attractive returns in 2008, growing 37 per cent annually, which will be followed by commercial and retail space, according to a new study.

"We do expect continued buoyancy in prices across the board, although on average these will prove more moderate than has been witnessed over the past few years. In short, we conclude residential units will offer the most attractive returns this year, growing by an average annual rate of 37 per cent to Dh2,100 per square foot, followed by commercial and retail space, which will increase at 23 per cent and 13 per cent, respectively to Dh3,800 per square foot and Dh5,800 per square foot," Egypt-based Prime Group said in a report on Dubai property market.

However, the company is "less" bullish on the hospitality segment with average room rates expected to increase 12 per cent to Dh1,060.

Prime Group based prices and rental yields in Dubai's realty market over a period extending from 2008 to 2010 on a model that captures differing levels of shortages and accompanying price elasticity within the various market segments.

According to the report, Dubai's real estate industry dynamics are firmly entrenched in Dubai Strategic Plan 2015, which strives to achieve a medium-long term objective of diversifying the economic base in key growth areas, defined as priority sectors within the associated blue print.

Of particular significance is the focus of the plan on real estate development and the construction sector, as well as travel and tourism, with the former providing necessary infrastructure for growth of all other businesses, and the latter ensuring sustained economic buoyancy through continuous and aggressive expansion in visitors to the emirate.

"Despite finding ourselves in an unarguably less benign global economic environment, we maintain a bullish outlook for the intermediate term extending over the coming two to three years, premising our assertion on robust demographic and economic indicators."

The current boom in the residential real estate sector is fuelled primarily by demand-based drivers including, aggressive population growth, high cost of living adjusted salaries which make housing increasingly affordable and improvements in liberalisation and the regulatory environment, according to the report.

More specifically in terms of demand, the addressable target market for residential demand, identified as one million individuals, belonging to households willing and able to afford independent housing, translated into a cumulative demand for 268,000 residential units in 2007, assuming a household size of four.

Against this demand, the cumulative stock of housing supply, based on residential units housing single families stood at 192,000 residential units in the same year, according to a recent publication by UAE public authorities. As a result, Prime concludes a pent-up demand figure of 75,000 residential units in 2007, representing 39 per cent of the supply of housing in Duabi at the time.

Going forward, demand growth accrues from increases in the target population at an average annual rate of 7.6 per cent.

Hence, incremental yearly demand in 2008 pertains to 24,000 units, rising to 27,000 units by 2010. Cumulative supply, assuming a 40 per cent delay on the year-on-year rollouts for all projects announced to date totals 375,000 units through to 2010, with the incremental annual rollout peaking next year at 67,000 units.

The implications of the aforementioned pattern for demand and supply in the Dubai residential market are that a 39 per cent shortage in supply in 2007 should revert to near balance status by end of 2009. "Our numbers also suggest a 31,000 residential unit surplus in 2010. It is important to note, however, that we believe assumption risks prove weighted towards an extension of the undersupply status post 2010, rather the opposite."

Meanwhile, Dubai's ambitions for developing office space are primarily driven by a multitude of factors, which have been detailed earlier including availability of low-cost non-Dubai national skilled labour, low energy costs and the presence of freehold Business Park space with limited or zero taxes.

In addition to these, the predominant factor, fuelling growth in the coming years will be the success of Dubai International Financial Centre (DIFC), which aspires to develop Dubai as the financial centre of the Middle East and North Africa (Mena), and South Asia region, if not for the world.

Accordingly, in addition to factoring in the growing labour force as a key determinant behind requirements for commercial space in the emirate, we have employed comparisons for global financial centres to determine the pent-up demand for the segment in Dubai.

Prime has utilised individual city data from Colliers International to compile information on the 2007 per capita sqm office space for the 10 leading financial centres in the world, splitting them into developed and emerging countries. The developed country centres include London, New York, Paris, Tokyo, Frankfurt and Brussels, which reflect an average 2.9 sqm per capita of commercial space while the emerging countries, represented by Hong Kong, Singapore, Mumbai and Shanghai show a comparable square meters per capita average of 0.5. The report has opted to utilise an average of 1.7 sqm per capita for the two individual markets – developed and emerging – as the benchmark for determining the associated segment's pent up demand.

"With Dubai, in 2007, reflecting commercial space per capita of 1.5 sqm, we conclude a 0.2 sqm per capita shortage, equivalent to 1.5m sqm of actual office space. Going forward, demand growth accrues from increases in the addressable labour force with an incremental yearly demand average pertaining to 164,000 sqm leading to a cumulative demand of five million square metres in 2010, equivalent to 2.0sqm/capita."

Based on projects announced to date, the market expects the addition of a cumulative 3.2 m sqm of office space, to the current stock of 2.4m sqm, over the coming three years.

With little available detail on when associated stock is scheduled to hit the market, the report has assumed the entire rollout to be equally split over 2008, 2009 and 2010. It has also assigned a 40 per cent delay factor, consistent with our assumption for residential units, to arrive at the cumulative supply estimate of 2.8m sqm by 2010, leading to a stock of office space supply of 5.2m sqm.

"We accordingly conclude that the 62 per cent shortage associated with the 1.5m sqm pent-up demand in 2007 will decline dramatically to 15 per cent in 2009, before the market achieves near balance in 2010."

Although the report forecasts "minimal surplus capacity in 2010," it is important to note Dubai is currently suffering from a dearth of office space in the market with the waiting period for the allocation of units to corporations in the DIFC reportedly in excess of two years.

Furthermore, there is also significant lack of Grade A office space in the market, with businesses being increasingly forced to move into temporary accommodations that are not ideally suited to their requirements. The lack of this "appropriate" accommodation, which is difficult to quantify could possibly lead to an extension in the shortage beyond 2009, the report said.

The numbers

23%: Average growth of commercial space in Dubai annually

13%: Average growth of retail space in the emirate annually

on Sunday, August 03, 2008

Villas and apartments nearing completion in Dubai are generating premiums of as much as 70 to 200 per cent a year, according to observers of the property market – far higher than the 10 to 30 per cent annual premiums for completed properties.

"Properties that are commanding the highest premiums in the market are currently those nearing completion. Take Jumeirah Lake Towers for example – the increase has been not less than 70 to 80 per cent in the last six to eight months, even before hand-over began on the development. These premiums are one of the highest in the market – higher than even completed projects," said Amr Soliman, chief executive Mena of Blu International Realty, a United States-based brokerage firm with representative offices in the Middle East.

"Generally prices make the biggest jump upwards starting six months before handover until six months after it," he said.

Adham Roshdy, director of sales for residential properties at Dubai-based Coldwell Banker, said: "Nine out of 10 residential property buyers in the market prefer to buy off-plan."

Agreeing with him, John Davis, chief executive of Colliers International's Dubai division, said: "Potential profit on off-plan properties is said to be higher than profit on completed projects, owing to favourable payment plans for first-time buyers."

At the Villa Project, a development by Dubai Properties and Mizin in Dubailand, which is due for handover by the first quarter of next year, prices have appreciated more than 200 per cent in the last two years.

"The handover of the project was delayed by two years. During that time it appreciated at a stable five per cent per annum. Suddenly, starting one year before the project's completion, prices have escalated by more than 100 per cent," said Soliman. "In January 2007, a four-bedroom villa in the Villa Project was Dh2.5 million; now it is Dh5m – a 100 per cent in increase in a year and a half."

The price per square foot at the Villa Project was Dh550 to Dh650 at the end of 2006 for a three-bedroom villa. Now it is in the region of Dh1,000 to Dh1,050 a square foot – a 90 to 95 per cent increase. A five-bedroom villa was Dh3.6m in December 2006; now it is Dh8m – a little over 100 per cent in a year and a half.

For villas at the Al Barari project in Dubailand, the premium has been 200 per cent on off-plan for two years. "The villas selling at Dh12m are now going for Dh36m," said Basel Al Kasem, CEO, Al Basel Group.

The Falcon City project, the Legends, and villas in Al Barari are some villa projects to look out for, as they will be ready for handover by the end of the year and the process will continue until the middle of next year.

"In off-plan properties a good payment plan comes from the developer who gives enough leverage to the buyer to flip his property around," said Roshdy further confirming last week's report by Standard Chartered titled Dubai – A tale of two housing markets.

Another factor in consideration for a buyer is that when he buys in the secondary market, he also buys into the payment plan of the previous owner and premiums have to be met by the buyer himself sometimes.

"Asking prices on villa projects that are not yet complete, such as the Jumeirah Park project or the Jumeirah Golf Estates, have increased by around 75 per cent," said James Knowles, director for sales and leasing, at Asteco Property Management.

"The investor market for off-plan or under-construction purchases remains very strong. There is still value in projects purchased off-plan where discounts against completed values are expected to compensate for the timeline for delivery before the property can be lived in or used as an income producing asset," said Knowles.

Further, within off-plan properties, apartments have been earning a higher return on investment than villas depending on the location and developer, according to Dubai's brokers.

"This has been happening because people are looking keenly towards ready apartments," said Basel Al Kasem, CEO, Al Basel Group.

"The Golf Towers by Emaar – a twin residential tower development overlooking the Emirates Golf Course due for completion in four to five months – has already achieved a 200 per cent profit since its launch two years back. The interest on the tower escalated further towards handover time," he added.

For off-plan apartments in Dubai Marina, the price per square foot was in the region of Dh800 to Dh900 two years ago. Now it is Dh1,500 to Dh1,700 per square foot, showing a 90 to 95 per cent increase, said Al Kasem.

Apartments at Dubai Marina were Dh800 to Dh900 a square foot two years ago and are now going for Dh1,500 to Dh1,700 a square foot. Localities such as Jumeirah Lake Towers and the Burj Dubai area, where apartments are due to be delivered in August and September this year, have seen 70 to 80 per cent price hikes.

Property brokers and analysts in Dubai are almost certain that prices of completed projects in the market are now appreciating only 10 to 30 per cent per annum.

According to Colliers International, a completed three-bedroom villa in The Meadows appreciated only by 30 per cent at the end of the second quarter of 2008, while the same property appreciated by 51 per cent in the second quarter of 2007.

"A completed two-bedroom apartment in Dubai Marina has so far appreciated 19 per cent in the second quarter of 2008, as opposed to 41 per cent in the second quarter of 2007," said Davis.

According to Blu International, in Arabian Ranches a three-bedroom villa was Dh2.8m last summer (July-August). It is now Dh3.8m, appreciating only by 26 per cent in the past year.

In Arabian Ranches again, the townhouses in Balmera were Dh2.8m in the first quarter of 2007. By the end of the year their prices had jumped to Dh3.3m. Now, at Dh3.8m, the increase has been 20 per cent since then.

Blu International says newer projects in Dubai will have higher values attached to them since they will have better finish and more advanced technology.

"By end of this year, you will not find any unit in the market that will be less than Dh1,400 to Dh1,500 a square foot. The Crescent in Palm Jebel Ali will not be less than Dh2,500 to Dh3,000 a square foot. At Meydaan and Dubai Maritime City, prices will be in the region of Dh3,000 to Dh4,000 per square foot by end of 2008," said Soliman.

Here is something from Wall Street Journal. You know the jig is up when the cost of renting a 2 bedroomed flat in dubai is nearing 30,000 - 50,000 USD dollars per annum. I have relatives living in London, New York, Los Angeles and Hong Kong and these rental prices are just plain unsustainable, they do not support the economy. I am not questioning the fact that Dubai was a place for excellent returns in the past but the fact is that the nature of the speculation has damaged the long term viabililty of Dubai as a place for business. Dubai has had a good run, but there are better returns to be had elsewhere.


On another note, rumour has it that the US has dispatched the largest naval task force to the Gulf seen since the Iraq invasion..however it has been subsequently denied. Perhaps they are looking to enjoy the torrid humid summer and a spot of light shopping. You can track this here

http://www.globalresearch.ca/index.php?con...;articleId=9817


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Dubai Homes In on Effort
To Cool Red-Hot Property Market
Flipping Frenzy:
Investors Get Wary,
Prices Seen Falling


By STEFANIA BIANCHI
August 13, 2008; Page C12

DUBAI -- Cracks are starting to show in Dubai's well-crafted and glitzy property-marketing machine.

Flipping properties has reached such a feverish pace, driving up prices, that Dubai's Real Estate Regulatory Authority, or RERA, is looking at measures to crack down on the practice, which involves quickly reselling property at a profit.

Meantime, a series of legal tussles and property-related scandals have rocked investor confidence, and analysts are forecasting that property prices, which have risen sharply in a matter of months, could tumble by as much as 10%, hurt by oversupply.

"Many challenges have begun to surface, mainly the prospect of oversupply," said Bahsar Al Natoor, a Dubai-based analyst at ratings company Fitch Ratings told Zawya Dow Jones.

Fitch says speculative real-estate investment, fueled by fast price rises, adds to the risks of the bubble inflating. Similar bubbles popped in the U.S., Spain and the U.K. after rampant flipping and other trends similar to those in Dubai.

Lacking the huge oil reserves of neighbor Abu Dhabi, Dubai has worked hard to turn itself into the region's tourist, business and transport hub. Real-estate development has been at the heart of this effort.

But the global economic slowdown has all kinds of markets teetering on an edge -- and while the cash-rich Emirates are considered havens for investors, they too may be vulnerable to slowing global growth.

The emirate, in 2002, was the first of the Arab Gulf states to allow foreign-property ownership. The Dubai Land Department estimates that the value of real-estate transactions in Dubai rose to 462 billion dirhams ($125.8 billion) in 2007 from 38.7 billion dirhams in 2002. The department estimates that transactions will reach 717 billion dirhams this year.

This has led to a flurry of sales and rental activity, with sales growth in the U.A.E. touching 65% last year. Property prices, meanwhile, have risen on average by 79% since 2007 and 25% in the first six months of 2008, according to New York-based investment bank Morgan Stanley.

Home prices on Nakheel's Palm Jumeirah -- one of three separate man-made-island clusters in the shape of palm trees off the coast of Dubai -- have risen more than 600% since sales started in 2002, with some villas that were sold for $700,000 five years ago now attracting offers of more than $3.5 million, according to Dubai-based property agent Betterhomes.

"There is a general consensus that certain sectors of the real-estate market in Dubai are currently being driven by speculation rather than market fundamentals," said Craig Plumb, head of research at property and investment-management company Jones Lang LaSalle in Dubai.

While RERA is looking at measures to restrict flipping, developers themselves are also imposing tougher resale rules. Homeowners at Nakheel's Trump International Hotel & Tower have to wait a year before they can sell their units on the secondary market, and Emaar Properties is restricting secondary sales of its properties until buyers have paid 30% of the total cost.

"Real estate isn't like the stock market. Only in Dubai you see people flipping apartments to make fast money," says RERA Chief Executive Marwan Bin Ghalita.

Morgan Stanley last week predicted that prices will start to fall in the second half of next year and could drop as much as 10% by 2010. In 2007, there were 245,000 condos, according to property consultant Colliers International. It expects annual additions of 61,000 units every year until 2010, reaching 429,000 units.

Fitch warns that the commercial sector also could "start experiencing a price correction" as massive new supply comes onto the market over the next two years. A further 5.6 million square meters of office space is due to come online by 2009, according to Colliers.

In the worst-case scenario, Morgan Stanley says, property prices could follow those of Singapore in the late 1990s, when real-estate prices plunged 80% in 18 months.

The market also has recently been rocked by a series of scandals involving some of the emirate's biggest real-estate players. So far, a robust economy and favorable regional economic conditions have deferred any slowdown and extended the period of rising prices. But the number of real-estate projects facing delays or cancellations is rising as developers face soaring construction costs and rampant inflation.

I rarely read the Wall Street Journal but, by coincidence, I read it on a flight from Los Angeles to Manila yesterday and I was going to quote this very article in this thread.

What I don't understand is how the WSJ can state Morgan Stanley are predicting falls of as much as 10% by 2010 .... i.e. unless I am mistaken, if a market goes into decline in a period after it has seen very significant rises, it usually falls by much more than 10% over a 2 year period and strips away much of the recent gains? I guess that the Morgan Stanley caveat is their Singapore example of the late 1990s.

Oh dear !

Not just a huge gain of 70/80 percent in property values whoever bought within the last year in Dubai - a double welcome bonus for investors have come in the form of the dramatic dollar appreciation against the pound sterling shown in the last couple of weeks.

As the UAE dirham is pegged at a fixed rate against the dollar in essence anyone who have bought UAE property have exchanged their pounds GBPs for dollars USDs.

In the last couple of weeks the dollar strengthened from a near 2 dollars to 1 pound to $1.86 = £1 which is an instant 7% gain just in 2 weeks. This means that anyone who had bought say a 1 bed in dubai marina this time last year for say around 150,000 GBP
and has had price appreciation to 250,000 GBP has automatically added another 17500 to the 250K just in the last 2 weeks.

It is further forecasted that the GBP will keep on weakening to reach a $1.70 to the pound in the short to medium term which has always been considered fair value against the dollar and lot of analysts now predicting that it could go further to $1.55 to the pound.

So the conclusion is that the next 6 months could be very exciting for the UAE property investor. If the dollar strengthens to $1.70 to the pound that would mean a 15% increase on your dubai marina 1 bed ie add another 35000 to the 250,000 you have already made. I would try and cash in the next 6 months especially if one owns multiple units.

Roll on the good times......

yes quite correctin everything you have said farrari
Dubai is is still an excellent investment and trade
The fact that every country in the world are suffering from infalation and the back lash from the state of the U.S. economy gives people little choice of where to speculate with their money
The same thing happened in the 70's when speculative stocks went flat and all people could invest in was commodoties or property
Property speculation is not an option in the U.S, UK, Spain , or australia at the moment and won't be for a considerable few years yet
and fuel prices are casting a grey area over the commodoties markets, agricultural ect.
which leaves dubai as single handedly being the only golden egg left in the world
I invest in Dubai property now, and my timing couldn't be better
I know I will see considerable returns during these times
I know If i stick with the prestigious developers like Nakeel or MINC my investment is safe

If the times are so good, why would someone want to "cash in" within the next 6 months?

Yes I agree whole heartedly- Dubai is still an absolutely fantastic investment
Its economy has remained stable throughout the hard economic times facing the rest of the world
and the gloomers as always- are hung around trying to put a spanner in the works with self fullfilling prophecies
But just like the weather in Dubai- investment is all sun sun sun
because hand in hand with the acomodation being built in Dubai- there is a new mono rail system, a new airport, a new theme park,
its great to be in a new modern city that has be done from scratch, with all the new technology that the new fast moving world demands
We are not worried in Dubai about problems facing the U.K and U.S.A- cos we know Dubai is good for it

happy days

Ulida - you quoted Ferrari out of context -
Ferrari was highlighting the point of the strength of the dollar/ Durham against the strength of sterling and used the term "to cash in over the next 6 months" to demonstrate the point of currency strength forecast, as a matter of short term trade- using the exchange rates to make money on property in Dubai.
This is why times are good and EVEN BETTER in Dubai at the moment.
. . . Really utilda, you should know better

If I have 8 units (apartments/commercial space) in Dubai and have bought the last ones in januray 2008 and have seen 80% rise in value and the fact that the dollar is strengthening against the pound - why should I not cash in just 2 units and take some profits. A wise/savvy investor will always do so.

My belief that the next 2/3 years will be good is still there as majority of my investment has not been liquidated - in fact if i sell 2 i will still be holdin onto 6

No .... it was a direct quote and not out of any context. Furthermore, as an investor in Asian (though not Middle Eastern) properties, I'm only too well aware as to the impact of currency fluctuations upon the paper value of my investments.


Whilst I can understand the rationale above, it appears to be much more of a trading / flipping strategy than a long-term property investment ..... and, as an outsider, it does appear that a large element to the high prices rises is driven by such speculation, rather than underlying economic fundamentals. When such a strategy works, it can be very profitable and I'm nothing against anyone who does it, but personally I wouldn't touch property in Dubai

you only quoted a part of the whole paragraph, in which the quote you took could be taken to mean something else
anyway
Obviously there are the trader speculators as you get in any property market
Where are your Asian properties? I am sure the presence of short term bull traders is there as well
i mean, people don't buy property because they think its gonna go down in price
There are some great underlying fundamentals driving the Dubai property market
People are all too quick to forget that the UAE has a strong economy due to oil
plus the position of Dubai, the range of lifestyles, the business located there, new technology - Its a Fantastic city
- I think I would prefere investment/trade in Dubai over any country in Asia any day of the week
I looked at many countries in Asia for investment and i found problems with all of them
I wouldn't touch any country in Asia with a bargepole
but whatever your strategy, short or long- Dubai is sound

feel free to quote me Ulidia, but include the whole paragraph this time please

I'll quote however I like, unless it is in a manner that is against forum rules.

OK do as you please

Arrival figures show Dubai is booming with developers looking to the long term
Saturday, 23 August 2008

http://www.propertywire.com/news/middle-ea...0808231513.html


Pessimists may worry about the property market in Dubai but the latest figures show the place is booming with 25,000 people taking up residence every month.
That works out at 33 people an hour and these figures don't include tourists who have now surpassed the 5 million per year mark. With the current population already topping 1.6 million it is anticipated that by 2010 there will be 2.2 million, with long term estimations of over 4 million residents by 2020.
There can be little doubt that Dubai is booming. 'To get some sort of visual perspective on the numbers involved and the overriding popularity of Dubai, it is perhaps easier to imagine the equivalent of the crowd of a premiership football match arriving every month,' said Oliver Hickey European Finance Director of Profile Europe (UK) Ltd, real estate and property consultants.
'Such an influx of foreign nationals is having the desired affect on Dubai and almost every industry is benefiting as more and more migrants stoke this thriving economy. With Dubai ideally positioned between East and West and vying to become the number one transit hub for world travellers, effectively knocking Singapore of its perch, its long term investment possibilities are superb with few other world destinations coming even close to Dubai,' he added.
The large developers are also confident. State owned Dubai Properties is set to almost double its real estate investment to $272.2 billion within the next five years. Mohamed Binbrek, CEO of Dubai Properties Group, said the company has 26 property plots still to be developed.
While Dubai remains the focus for the firm it is considering options for expansion overseas, including opening an office in India and looking at opportunities in Pakistan, Tunisia, Qatar, Uzbekistan, the Maldives and Madagascar.
Sailing is another growth area. Dubai is likely to be home to more than 20,000 new marina berths within the next five years, according to Island Global Yachting, the luxury marina developer and management company.
Dubai Airport Free Zone has attracted more than 1,425 companies and it continues to attract increasing investment into the country.

Yes Absolutely Dubai is booming

It just seems to be resilient to the credit crunch and inflation facing the rest of the world

I heard there is talk of the government putting a cap on building in Dubai to come into force in the next 3 years

Another black day for real estate shares
by Thomas Atkins on Tuesday, 26 August 2008

DUBAI SHARES: Real estate companies continue to struggle.

Shares of Emaar Properties closed at their lowest level since April 2005 as real estate shares in the UAE fall on continued concerns about a crackdown in corruption and speculation.

The stock ended 1.42 percent lower at 9 dirhams as Dubai's main index slid 2.38 percent to 4,706.25 points.

The stock fell to as low as 8.95 dirhams during the session.
Story continues below ↓
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Union Properties ended 3.8 percent lower while Deyaar declined 2.14 percent.

Emirates NBD, the UAE's biggest bank by assets, led the decliners, falling 4.5 percent.

In Abu Dhabi, financial and property shares weighed on the main index which slipped 2.18 percent to 4,365.48 points.

National Bank of Abu Dhabi declined 4.4 percent and Aldar Properties fell 5.74 percent.

Industries Qatar and Qatar Gas Transport Co <QGTS.QA> (Nakilat) fell 5.06 percent and 4.95 percent respectively as the country's main index ended 2.85 percent lower at 10,397.30 points.

In Kuwait, Kuwait Finance House fell 2.22 percent and National Industries Group 3.51 percent as the index shedded 0.31 percent to 14,520.40 points.

Bahrain's benchmark also fell 0.31 percent, with Bahrain Telecommunications Co sliding 2.1 percent.

Oman Flour Mills was the biggest gainer in Oman, leading the main index to a higher close.

The stock rose 1.49 percent and Galfar Engineering and Contracting Co climbed 1.44 percent as Muscat's measure ended 0.06 percent higher at 10,192.64 points.

Saudi Arabia's leading index edged 0.23 percent higher to 8,955 points with heavyweights SABIC and Al-Rajhi Bank all up slightly.

The kingdom's index has rallied since moves by regulators earlier in August to ease restrictions on foreign ownership of Saudi shares, leading investors to position themselves ahead of expected foreign buying. (Reuters)

a nlittle fluctuation in share price is not going to scare us in our property investments
I'm sure they will be back up next week

In Dubai its been seen before that when share prices go down it creates excess liquidity amongst investors and most of the cash goes back into property - this is what happened two years ago when the dubai stock market tanked - it lost more than 50% of its value I believe and that was the start of the second leg of the Dubai property boom - so it is not bad news for the property market that the stockmarket is going down and that might be one more reason why the property market is so buoyant currently

I have read another article which stated that the reason for the Emaar shares dropping is because of its untimely investments into foreign western markets like US and Canada where the property market is tanking. Thus if Emaar was fully exposed to the UAE market (which it suppose it didint as it wanted to diversify) the shares price would not have suffered - but hey why talk about shares here - we are talkling about property

you hope ya mean.who you trying to convince?

Dubai property heads off-plan

By Andrew England

Published: August 28 2008 03:00 | Last updated: August 28 2008 03:00

Speculation about whether Dubai's real estate bubble will burst has been a favourite pastime of Gulf watchers for years, as one mega construction project has followed another. Doom-laden predictions have failed to materialise - so far.

With property prices up about 40 per cent this year - and a soaring 79 per cent in the past 18 months according to Morgan Stanley - questions about the sector are surfacing again.

In recent weeks Standard Chartered has issued a report warning that excessive speculation is creating the risk of overheating. And Fitch, the ratings agency, has said that "many challenges have begun to surface", mainly as a result of oversupply.

Morgan Stanley has created the biggest stir with a report that forecasts a probable 10 per cent fall in property prices by 2010. In the worst-case scenario, the US investment bank said, Dubai's real estate market could follow the trend of Singapore in the 1990s, when prices plummeted 80 per cent in 18 months.

Morgan Stanley's predictions were based on the assessment that oversupply would surface from the second half of next year. Others disagree. HSBC believes that, with sustained population growth of about 7 per cent and construction delays slowing delivery to the market, demand will continue to outpace supply until 2011.

"If you read the brokers' reports in 2006, most of the brokers were saying that there was an oversupply coming to the market in Dubai. Then they pushed it forward to 2007, now to 2008," says Majed Azzam, analyst at HSBC. "We don't see a danger any time soon." He describes the markets as "very tight", with occupancy levels high and "a huge shortage" still. "Your population is growing very fast and the developers are not delivering on time."

A big issue for market watchers is the lack of transparency, however. The largest developers are affiliated to the government or the ruling family, and authorities could intervene at any time to delay projects or simply take over buildings if demand dissipates.

The property market is critical to the overall health of the emirate's economy because it touches on many other sectors and acts as a bellwether for other Gulf states. Real estate and construction accounted for about 30 per cent of Dubai's gross domestic product last year, according to HSBC.

Sean Gardiner, head of research at Morgan Stanley, acknowledges that the potential for government intervention in the market is a risk to his forecasts.

"It's very difficult from both supply and demand because access to quality data tracking these two drivers is limited," he says. No one knows the income levels of the people who arrive in the country each day. "How many work as unskilled labour on construction sites? How many work in the service industry, where housing and food is included in their monthly pay?"

Some new arrivals can afford property, but the numbers are not available, Mr Gardiner says. "Visibility is very low."

The bear case comparison between Dubai and Singapore in the 1990s is not probable, he says, because the emirate is unlikely to suffer a broader economic crisis.

"There's a call here where we think there is the risk of the market experiencing a soft landing, and there's the other, more important call: as an investor are you going to be buying Abu Dhabi or Qatar over Dubai?"

Where there is consensus is on the issue of speculation in the market, which has intensified this year, particularly in regard to properties under construction. With negative real interest rates and the poor performance of Dubai's equity market, real estate has become a favourite for investors and a sponge for much of the liquidity in the market.

Off-plan properties are particularly attractive because investors - who analysts say include wealthy individuals, local and foreign, and US and European hedge funds - put as little as 5 per cent in down-payment.

Emaar and Nakheel are among large developers that have announced restrictions on off-plan sales in a bid to tackle speculative buying.

But Marios Maratheftis, head of research at Standard Chartered, says the authorities could be doing more, even though he believes the fundamentals are positive.

A concern of his is that much of the speculative investment may be financed with consumer loans rather than mortgages, which could create debt problems in the future. Regional banks already have strong exposure to real estate and bankers have suggested that some lenders are growing cautious of the sector in Dubai.

"If this excessive behaviour continues, there is a risk of a correction in the future," Mr Maratheftis says. "Wherever that has happened elsewhere it has been destabilising."

Copyright The Financial Times Limited 2008

Will Dubai real estate prices spike in September?

Each year for the past three or four years this column on AME Info has posed the same question about prices in September. There is always a fear that after the summer break this might be the year house prices falter. But then again a trend is usually your friend until it is not, indeed this year there is every reason to expect house prices to fire up stronger than ever for the autumn season.

United Arab Emirates: Wednesday, August 27 - 2008 at 12:18


That might appear odd when housing markets from the US to the UK and Spain are in deep trouble.

But these markets are also a reminder that housing booms move in distinctive phases.

Markets move from a depressed stage slowly into higher levels of activity and moderate price increases.

Then the momentum builds, house prices accelerate and eventually something happens to ***** the price bubble.

In the UK and Spain it was the sub-prime crisis last summer and the subsequent mortgage famine that finally undid a spectacular 14-year run of rising prices.

This was about a year behind the US where prices first started to show weakness after a big run up in prices and endless TV shows on how to buy property by maxing out credit cards.

US monetary policy
It was this fall in US prices that precipitated the sub-prime crisis.

And the US Federal Reserve has responded by undoing its monetary policy tightening, lowering interest rates to 2% and allowing inflation to rip across consumer prices while bailing out the banking sector.

Dubai property is in a very different phase of the cycle.

Indeed this six-year old property market spent the first three to four years catching up with global markets in terms of pricing, and arguably still has some way to go.

With rental yields on villas and apartments substantially higher than cities in the US and UK, it is hard to argue that Dubai property is over-priced.

That might well change this autumn if the turbo-charged price changes of the past six months are repeated, and nothing has happened to slow price rises down.

Indeed, the Fed's low interest rates, designed to lessen the impact of a recession in the States, have added fuel to an economy benefiting enormously from the same high oil prices that are reaping havoc in the consumer nations.

Money is pouring into the Middle East, and with real interest rates negative then high-yielding and speculative real estate is a highly attractive investment option.

Dubai real estate to remain the same
Why should this change this autumn? It is not as though the Dubai real estate market is that big yet in terms of unit numbers.

Most property developments are also running horrendously late and supply is short. Thus the upward price pressure on available, completed accommodation is strong.

Where a speculative blow-off, or even crash, is possible in the future is in the off-plan sector, although risks there have been considerably reduced by the creation of the Real Estate Regulatory Authority last July and its implementation of compulsory escrow accounts.

In fact, what surely lies on the immediate horizon for Dubai property is the impact of a further reduction in US interest rates as a response to a collapse in US capital markets.

That might just provide the final spur to Dubai property prices before a correction. But as in the US, UK and Spain the real estate sector could boom for much longer than expected, even by seasoned observers.

"In fact, what surely lies on the immediate horizon for Dubai property is the impact of a further reduction in US interest rates as a response to a collapse in US capital markets."

What is your source for this comment?
Fed speakers recently have been saying that the next move is up.

Leveraged speculation will be dampened by increased rates in the US.

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Is Dubai the Bubble It’s Made Out to be?
By Bill Bonner • August 28th, 2008 • Related Articles • Filed Under
About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.

See All Articles by This Author

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Filed Under: Market
Tags: bubble • dubai
Aussie born colleague Joel Bowman of The Rude Awakening lives in Dubai. We wondered whether the place was the bubble we had heard, so we posed the question to him. His reply:

"My short stay here in Dubai has led me to believe that Dubai & Co. is a largely unsustainable enterprise.

"Dubai's lifestyle makes the average American look like a prudent, energy-conscious, environmentally-friendly health nut! I read the other day that 60% of the average Emirates' total income is spent on consumer goods - Gucci totes, designer abayas and million-dollar number plates.

"The big difference I can see is that, save for the last few years, the vast majority of America's wealth accumulated over time and from the productive, honest toil of citizens who forged metal, cracked bullwhips and invented light bulbs. Dubai's wealth has come on fast and strong...and is not really the product of its own honest toil. Were it not for American, British and French companies - among others - who told them what all that black stuff underfoot was and what the rest of the world was prepared to pay for it, Dubai might still be a pearl diving port of a few thousand itinerant workers.


"If the American economy is drunk on its own home brew of 'irrational exuberance,' Dubai is sucking down straight tequila shots and desperately trying to catch up. We see it here everyday as the government squanders its unearned wealth on extravagant welfare programs and 'National Identify Preservation' boards and committees dedicated to 'cultural heritage association' this and 'watchdog for immoral behaviour' that. Then there's the over-reaching controls on the economy - price fixing, wage manipulation, rent caps...the list goes on.

"I read with interest the 'Frapp On Ice' story just the other day - about how Starbucks will close 600 stores over the next year as discretionary consumer spending shrinks. That story was all the more amusing for me as I actually read it on my laptop... in the Starbucks that just opened in the lobby of my building last week. There are now six Starbucks within walking distance from my front door (and I don't walk far - it was 125 degrees on Monday). We also have numerous Seattle's Best, Krispy Kreme's and the rest of the strip mall junk to go along with them. It's like anytown USA...super-supersised. Which brings me to my next point...

"Jumeirah Beach Residence (or JBR for the cool kids) is a 36-building project that opened a year or so ago. Each building is around 40 stories and there is said to be space for 25,000 people to live here. But where are the people, I ask myself? So few apartments are occupied that I still notice when a conspicuous new light comes on at night in the surrounding buildings...yet, apparently, most are sold. I can't see the newbies rushing to cut more keys as rent prices have, get this, risen by over 50% since we moved in in December. We took a relatively comfortable two-bedroom with a decent view, but if I walked in off the street today I couldn't get a studio on the first floor for the same price.

"The story is similar elsewhere in the city too. Projects are developed, pumped through the massive Dubai & Co. media arm and, voila! the joint is 50, 60, or 70% taken! 'It's another success story,' ring the papers 'Dubai's world-beating ingenuity triumphs again!' chorus the king and his merry band of sycophants. But, best as I can make out, the biggest developments - including JBR, touted as the 'largest single- phase residential project in the world' - are still ghost towns.

"A friend of mine was out the other day to inspect a house he saw for sale in one of these new developments (Arabian Ranches, in this case). The price was at the top-end of his budget and he was 'umming and ahhing' about it until the estate agent casually threw in, 'now, this property is only available in lots of 10.' In other words, the development is being sold off in 10-house chunks to middle-men who then flip 'em and burn onto the next 'world beating' development.

"So who's buying all these vacant houses, streets and islands? Some - and not just the conspiracy theorists either - say Dubai is a massive funnel for dirty Russian money. Others, including myself, reckon speculators buy into the hype...hoping a bigger idiot will buy into it a year later and hand them a handsome return.

"The trouble is, sooner or later you're going to run out of idiots. Even here in Dububble the supply of them is not without limit."

Bill Bonner
for The Daily Reckoning Australia

I wonder why foreigners are driving real estate stocks lower Aldar is 28% down this year alone ......maybe they saw this law coming deemed necessary to support the local economy, however it might be to late for the market, time will tell.


New law limits speculative ‘flip’ sales
Robert Ditcham

Last Updated: August 25. 2008 11:08PM UAE / GMT
The days of home buyers trading real estate in car parks of property exhibitions, such as Abu Dhabi's Cityscape, are over thanks to a new law. Ryan Carter / The National
The days of home buyers trading real estate in car parks of property exhibitions are over thanks to a new law requiring owners to register their purchases before reselling them.

Law number 13 of 2008, announced this week by the Dubai Land Department (DLD), obliges purchases of even uncompleted flats and villas bought “off plan” to be registered with the department first before they can be passed on to a new buyer.

Until now, the trade of off-plan property has been unregulated, allowing speculators to “flip” the ownership of an uncompleted home for a profit just hours after making the purchase. The practice has led to chaotic scenes at property launches and exhibitions and fuelled rapid inflation in property prices. Buyers of completed properties, on the other hand, had to register with the DLD and pay transfer fees, receiving official proof of ownership in return.

The new law, plans for which were revealed by The National in May, has made it compulsory to register all off-plan and completed freehold property before it can be resold.

Analysts say it represents another attempt to stamp out the speculative buying that threatens to overheat the UAE’s property market. Several developers in Dubai and Abu Dhabi have said they will not allow buyers to resell their home until a minimum of 20 to 30 per cent of the property’s value is paid off, while Standard Chartered bank last month called for a capital-gains tax on property sold within a year of purchase.

“It will bring a level of control to the market from the point of view of people making a quick profit and getting out, and therefore overheating the market,” said Peter Penhall, the chief executive of the property portal Gowealthy.com.

“It’s trying to eliminate the speculator who purchases stock without having the adequate financial resources to complete the payments, should he be unable to sell.”

Most speculators pay a down payment on a property, often 10 per cent of its full value, and seek to resell for a profit before the next instalment is due several month later. Many do not actually have the funds in place to finance the full cost of the unit, setting up a high-stakes gamble that could have serious consequences if prices were to dip, Mr Penhall said. “There’s an element of overplay and that’s the area that [the law] is trying to address,” he said.

Under the new regulations, property developers store details of all off-plan sales from their projects on a computerised database, including the identity of the owner and seller, the value of the property, its location, the mortgage arrangement, the payment history and applicable fees.

Sales that have not been registered at the Land Department will be considered void.
Officials at the Real Estate Regulatory Agency (Rera), Dubai’s property market regulator, said the system would effectively become the first point of registering property and land sales in the emirate, and would speed up the process of issuing registered title deeds when the fully constructed building is handed over.

The law also states that property developers will be penalised for charging people to register their newly purchased homes with the Dubai Land Department, a payment known as a transfer fee, Rera officials said.

Under existing regulations, the DLD is permitted to charge both the seller and buyer one per cent of the value of the home to issue and register a property title deed. This registration process applies each time the property changes hands.

Some property developers have been accused of applying their own additional registration fees, a practice now prohibited by law. With two sets of charges, the amount that buyers paid to register their property reached hundreds of thousands of dirhams. Marwan bin Ghalita, the chief executive of Rera, said developers will only be permitted to charge a fixed administration fee in return for completing the registration process on an owner’s behalf.

The introduction of the law follows attempts by property developers to restrict speculative buying. Nakheel requires buyers at the Trump International Hotel and Tower to hold onto purchases for a full year before they can resell, while Emaar requires them to pay 30 per cent of the total purchase price. In Abu Dhabi, Aldar Properties is planning restrictions for resales on its next phase of properties, coming onto the market later this year, according to Ronald Barrott, the company’s chief executive.

we see share prices in any market fluctuating slightly all the time, thats the nature of the stock market
Dubai stock is not even close to being in as much trouble as the U.K. or U.S
Property prices are behaving normally in the dubai market, Nice steady increase
Nice and predictable
Lovely Jubley

--Phew can't keep up with the news at the moment ----

Dubai property to cool down as sector awaits correction
By Gaurav Ghose, Financial Features Editor
Published: August 31, 2008, 23:30


Dubai: The prevailing high prices in Dubai's real estate sector are not sustainable for long and a slowdown is likely, a top asset management company chief executive said yesterday.

"Prices are bound to stop growing at this maddening scale," said Shehab Gargash, chief executive officer (CEO) of Daman Investments, on the sidelines of a press conference to announce investment in renewable energy venture. "Will it be a crash? I don't think so. I doubt we will see a significant long-term bust. But we will see corrections."

As long as demand continues to grow, the real estate sector will witness growth and prices will rise, he added. "But Dubai is no longer a straightforward build-and-sell proposition."


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In recent weeks, the real estate sector in the UAE has been under the spotlight for various reasons, including a much discussed, and criticised, Morgan Stanley report which said that Dubai is headed for a 10 per cent dip in prices in two years when supply comes online.

Gargash, however, did not elaborate on the kind of correction the market may experience but said that the market is in consolidation phase. He said that the market will see a differentiation in terms of good quality and bad quality developers.

A developer agrees with Gargash's thoughts. Given the "unrealistic" spiralling of the price of land in Dubai, property prices have been skyrocketing, said a developer and "that is simply unsustainable."

"The prices are unreasonably high", said Mohammad Nimer, chief executive officer of MAG Group Property Development. "It is becoming less and less attractive for investors and end-users and so, a correction is bound to happen. And people who bought will actually realise that the price they paid was 'inflated' and the secondary market investors and buyers will stop and think before they invest," he added.

Over the past month, the Government of Dubai has passed a mortgage law that makes registration compulsory and also that cracks down on off-plan sales, giving rise to fears of speculation coming down and the market getting badly dented. "The new laws passed will have a positive impact on the market, though they will slow down the market. The market will be harder but it will be stronger," he said.

It is premiums that the market has witnessed in recent years that may become a thing of the past, said Sudhir Kumar, managing director of Realtors International, adding that he is not expecting a slackening of the market in the next two years.

"There may be a temporary shake up of the market, given the corrective measures being taken," he said. "What is possible, is when all the regulations are passed, then the abnormal rise in premiums will not happen."

There are good things going on in Dubai as follows:

Dubai Properties to double investment to $272bn

State-owned Dubai Properties is set to almost double its investment in real estate to 1 trillion dirhams ($272.2 billion) within the next five years from 565 currently billion dirhams, said its group CEO.

Mohamed Binbrek, Dubai Properties Group CEO, said the company has 26 property plots still to be developed, UAE daily Emirates Business reported on Thursday.

The developer is confident of reaching 700 billion dirhams worth of investment in the next three years, Binbrek said.

Dubai Properties, a subsidiary of Dubai Holding, reached 550 billion dirhams in investments in April, with the launch of its Mohammed bin Rashid Gardens mega eco-project.

Binbrek told the newspaper Dubai remains the focus for the firm, but it is considering options for expansion overseas, including opening an office in India.

The firm is also considering opportunities in Pakistan, Tunisia, Qatar, Uzbekistan, the Maldives and Madagascar, he said.

/24-7PressRelease/ - BURNLEY, UK, July 19, 2008 - With property markets in Europe and the US heading towards a prolonged downturn, Dubai is bucking the trend on the back of the global surge in crude oil prices, with the prices of property for sale in Dubai rising by over 75% during the first half of 2008.

Already oil prices have jumped 48% in the first half of 2008, compared to 57% during all of 2007, with current prices around $145 a barrel, compared to just $60 a barrel in early 2007.

Goldman Sachs are forecasting oil prices will rise to between $150-$200 a barrel over the next six to 24 months, increasing the likelihood that the Dubai property market is about to enter into a new period of sustained growth.

Zuber Mohsan, CEO for Dubai-based sandcastles-property.com says: "In contrast to the US and Europe, Dubai is currently experiencing an economic boom on the back of rising oil prices. Demand for both commercial and residential property in Dubai is currently fuelling the growth as businesses look to expand and workers look to buy property in Dubai."

Mohsan believes the current trend will see Dubai property prices continuing to rise through the second half of 2008."With oil prices only heading in one direction, property prices in Dubai will continue to rise," added Mohsan.

Rising oil prices are not good news for everyone though; rocketing aviation fuel prices has caused several executive airlines to go out of business, including Silverjet, a business class airline operating from Luton to New York and Dubai.

The carrier, along with Maxjet and Eos, its rivals, was founded as an attempt to tap into the rapidly growing business travel market between the UK, New York and Dubai. However, the start-up carriers struggled to match the frequency of flights offered by larger rivals and other perks, such as air miles and went out of business last month. Eos and Maxjet both also filed for bankruptcy protection this year.

errhhh......just to point out that this is a press release from a property company

[quote name='50 cool 50' date='Sep 2 2008, 05:22 PM' post='1287785']
/24-7PressRelease/ - BURNLEY, UK, July 19, 2008

Zuber Mohsan, CEO for Dubai-based sandcastles-property.com ..says:

Mohsan believes the current trend will see Dubai property prices continuing to rise through the second half of 2008."With oil prices only heading in one direction, property prices in Dubai will continue to rise," added Mohsan......well he got that wrong and its only September!!!!!

Palm and Atlantis feature on sky news

http://news.sky.com/skynews/Archived-Conte...credit%2Bcrunch

Yes and Abu Dhabi have bought Manchester City to make it the biggest football club in the world
(bigger than Manchester United),
this will help property prices in Dubai when the Sports city is ready to host sporting events

What's the quickest way to become a millionaire?

Be a billionaire first and then buy a football club...

Wow Palm and Atlantis hits the news again smoke, mirrors and property sums Dubai up nicely.

Dubaiexpat - bit silly/sadistic to glee over an unfortunate event like a fire, wouldnt you say - imagine if it was your own house

Question: If the Dubai is still booming why is the leading indicator tanking .....Emaar now at a three year low. Dollar strength, falling house prices in USA and Europe make Dubai real estate overvalued in comparison.


Emaar plunges 3.3% as UAE stocks decline
Bloomberg
Published: September 05, 2008, 00:20


Dubai: The Abu Dhabi Securities Exchange General Index slipped 0.8 per cent, falling for a fifth day while the Dubai Financial Market General Index declined 1.3 per cent.

Emaar Properties closed at its lowest in more than three years. The Middle East's largest real-estate developer declined 3.3 per cent to Dh8.77, the lowest close since April 2005.

Oman's Muscat Securities Market 30 Index fell 3.9 per cent to 8,832.86, its lowest close since December 5. Qatar's Doha Securities Market Index retreated 2.1 per cent, bringing the three-day drop to 4.9 per cent.

Omantel, Oman's biggest phone company, dropped to its lowest in almost a month. Industries Qatar, slid for a third day.

"Foreign investors came to the Gulf to hedge against the low dollar,'' Adel Waleed Nasr, local brokerage manager at United Securities in Muscat, said.

"Now the dollar is gaining and the oil is falling, which means government surpluses will shrink.''

The Kuwait Stock Exchange Index lost 0.9 per cent and the Bahrain All Share Index retreated 0.4 per cent.

Al Abraj Holding dropped 3.1 per cent to 630 fils. The Kuwaiti investment company that owns industrial patents plans to increase its capital 76.5 per cent by selling 130 million shares to existing shareholders and "strategic investors.''

Crude has lost about a quarter of its value since reaching a record $147.27 a barrel on July 11.

The Gulf Cooperation Council's current account surplus is almost $1 billion per day with oil at $140 per barrel, Merrill said.

The six Gulf Arab states earn a further $55 billion per year each time the oil price jumps $10 a barrel, Merrill Lynch said in July.

thats a silly statement
isn't it the case that the europe /USA markets have declined due to bad management and Dubai has kept its constant trend ?

Dubai to scale new commercial heights

Publish Date: 2008-09-05 02:00:04 Story Code: 3503

Dubai, a city of tall towers and even taller ambitions, could soon become the most expensive commercial real estate location in the world.

Does that claim sound outlandish? It's not.

Recent reports already place the emirate sixth on a list of the world's costliest office space cities behind commercial big-hitters London, Moscow, Hong Kong, Tokyo and Mumbai.

In London, currently the world's most expensive location, investors are becoming timid as they sit out the effects of a global credit crunch. Gloomy financial forecasts and belt-tightening measures have contributed to plummeting commercial property values with the latest figures pegging a 20 per cent decline in value and dark rumblings in the financial press that more bad news is on its way.

After more than a decade of good years, with positive returns, it looks like this wintertime could herald a number of barren years for the English capital.

Meanwhile in the shiny, optimistic skyscrapers of Dubai, where the sun always shines, the sky is quite literally the limit when it comes to real estate. Voracious demand for office space is forcing prices through the roof and supply lags years behind.

It's possible that spiralling costs may deter companies from setting up larger headquarter type offices in Dubai, prompting instead the setting-up of smaller, representative arms of businesses giving investors a presence in the Middle East, but not a head office.

It's hard to see prices coming back down to earth much before 2012, but what happens after that is the big question for the UAE right now.

As of today, Dubai has around 19.1 million square feet of office space which boasts an incredible 98 per cent occupancy rate. Of the commercial property that is sold, most is snapped up off-plan as developers strive to keep up with demand.

Between now and 2012, 75.8 million more square feet will enter the market. With more commercial property finally available in the UAE, it will be interesting to see what happens to prices both here and abroad.

London's Olympic Games could be a much-needed shot in the arm for commercial property values in the UK in the run-up to 2012, while places like Singapore and Mumbai will be aiming to steal a slice of Dubai's booming real estate action. But on the other hand there can't be many places in the world with as much development planned as Dubai in particular and the UAE in general.

It would be a very fussy investor who couldn't find something that ticks all their boxes amid Dubai's myriad of imaginative commercial developments. Dubai International Financial Centre, Business Bay, Burj Dubai complex - all these places have been designed to tempt companies to set up shop in Dubai.

Yes, the cost of building supplies will continue to increase as the global market experiences a slow-down, and that may push prices up even further. It could also affect building schedules here, but a quick flick through the raft of mixed-use and office specific developments announced almost daily in the UAE gives some indication of the buoyant optimism in the market here.

Inflation was pegged at 11.3 per cent at the end of 2007, while rent rose by 17.5 per cent. But instead of being a prohibiting factor, these spiralling costs have not seen a slow-down in the property market in 2008.

According to a recent market study, Dubai has seen a 136 per cent increase in property sales in the first-half of the year and there seems to be no sign of this changing at present.

It feels slightly unsatisfying to say 'wait and see' when it comes to the long-term forecast for commercial property prices in the UAE, but in the current climate that's all we can do.

© Gulf News 2008. All rights reserved.

50:50 ....dollar strength means investing in real estate in Dubai is more expensive to Europeans. Currently any form of leveraged speculation is difficult within a credit squeeze environment. In addition, the situation is compounded by wider falls in equity markets, speculators will be liquidating foreign assets to cover margin calls at home. Property Prices here are or have peaked, consider Florida condos which are now at $170 per sqft ....thats 620 AED per sq ft, work it out where do you think your yield / return on investment lies when you consder future rent and capital growth. Going forward Dubai is less attractive than other areas around the globe. Money will always find better returns and thats why speculators will be looking to exit regardless whether its equity or other asset classes such as property. I am pleased that the Dubai Government are shaking out speculators in this market, both prices and rents are not supportive of Dubai's future. Hopefully the new legislation will help build a more productive future based on goods and services unlike the situation now where developers are making studio flats not for homes but for speculators money.


Shifting assets show Dubai market risks
source the National
Vivian Salama

Last Updated: September 06. 2008 6:03PM UAE / GMT DUBAI // Foreign investors continued to file out of the Dubai Financial Market last week, selling a net Dh1.38 billion worth of stocks as they brought money home to meet obligations there or shifted investments into other markets. Still, the selling amounted to less than in the previous week, when Dh1.66 was sold by foreigners.

Saudi Arabia’s decision to open its markets further to foreigners, coupled with a corruption clampdown in Dubai and a strengthening US dollar have all contributed to a shift of assets into other markets showing potential in the region, according to analysts and investors.

“We decreased investments in Dubai over the last two weeks and increased our funds in Saudi,” said Udo Schaeberle, the director of clients at BHF bank, the Abu Dhabi branch of the German wealth management company. “Definitely, Dubai is the market that has, in our opinion the biggest risks, mainly from the real estate side.”

Financial and property stocks – two sectors that represent the significant majority of listed businesses in the UAE – have been especially hard hit as talks of a “bursting bubble” grow more pronounced. Saudi Arabia and Kuwait are growing in appeal to foreign investors losing confidence in Dubai’s recently volatile market.

In trading yesterday, Shares of Saudi Basic Industries Corp (SABIC) and banking stocks weighed on the Tadawul, pushing it to its biggest one-day loss since January. The index closes 5.41 per cent lower to 8,044.79 points. SABIC closed 8.13 per cent down to 110.25 riyals, its lowest close since October. Al-Rajhi Bank 1120. SE ended 4.99 per cent down and Samba Financial Group 5.92 per cent retreats 5.92 per cent.