Property Prices
Discussion
Whats our opinion on Dubai's property prices?
I'm toying with the idea of selling in the UK, and buying here.
I realise that prices are silly at the moment and I expect Villa prices to fall a tad over the next 6 months or so, purely down to the fact that there are thousands of them that will hit the market in that period.
UK prices are at their highest for 6 years, and people back home suggest they won't rise much higher (just outside of London).
What do we think? Anyone got any ideas with foundation, as opposed to my pie-in-the-sky thinking?!
Cheers.
I'm toying with the idea of selling in the UK, and buying here.
I realise that prices are silly at the moment and I expect Villa prices to fall a tad over the next 6 months or so, purely down to the fact that there are thousands of them that will hit the market in that period.
UK prices are at their highest for 6 years, and people back home suggest they won't rise much higher (just outside of London).
What do we think? Anyone got any ideas with foundation, as opposed to my pie-in-the-sky thinking?!
Cheers.
Would you buy somewhere to live in straight away or off plan?
Buying completed could mean it tenanted so carries it's own set of issues in terms of getting the tenant out etc.
I think it will take longer than 6 months for things to correct (drop) here, especially in established developments/communities.
Buying completed could mean it tenanted so carries it's own set of issues in terms of getting the tenant out etc.
I think it will take longer than 6 months for things to correct (drop) here, especially in established developments/communities.
Whilst I told myself I would never offer opinions on whether to buy, I am in this case. However, please feel free to completely ignore or reject what I say based on your own experience.
I have been here 10 years and if you want my "opinion" only, I would say a resounding no. I would personally say this for the following reasons:
- For many areas the prices now are more than they were back in the highs of 2007. To me, that rings bells. Take that how you will, however as an example, you could have bought a 2 bed flat in the Marina last year for 1.8 and now its 2.6 for the same apartment. (I have some particular units in mind) The price on Houses in the Arabian Ranches has gone crazy again and the same 3 bed house 2 years ago was around 3.2 million and is now apparently selling for 5.4 or there about's.
- I believe that some are buying, no doubt, however with the change in transfer fees to 4% (from 2%) and the Loan To Value Ratio which banks can offer, I believe this will cool somewhat and the spurt of buying which happened in the last 6 months will slow considerably.
- Emaar are literally launching a new development every week and with the other properties going up in a similar fashion it very much reminds me of what hapenned last time. Real Estate Agents are pushing up prices in a bid to win business/listings from owners and most buyers are panicking. I believe most "Investors" dried up months ago as there aren't many margins. Many may well be taking some risks based on what they think will come to fruition based on location, however that is a risky game unless you have cash to risk.
Of course, many well known analysts say that if you are an end user buying a property to live in then it doesn't matter so much about prices as its your home and fluctuations wont make a difference because if you are not planning to sell then it doesnt affect you anyway. (Until of course you maybe need to sell)
Should you decide yourself then fair enough, a little advice what I would personally do:
- In Dubai (just as elsewhere) location is key. Personally, if I were buying an apartment I would buy in the Marina - Near to Beach...but not JBR. and if it were a house I would buy in Arabian Ranches. There are a few other reasonable developments now, how the ranches is by far the most established and good quality. (This is where we are)
- I second what others say, always buy a COMPLETED place. Not offplan. I can see the sh#t hitting the fan again with some developers and you will be left stranded with paying the mortgage and battling with the developer and bank. Seen it scores over after the crisis. Besides, there are so many damn villas and apartments there really is no need to buy off plan.
- I would swerve any Expo 2020 developments. Show me one major development around the world which has breathed life into a certain area in the long term.
All in all, personally, I would wait till the dust settles. Property markets are cyclical around every 5 years or so and I have the feeling that in about 2 years or so the prices will correct. 1 million aed on a villa is let's not forget around £180,000 and that's a chunk of change. Of course, rental rates are a factor if you are living here and spanking 20-50k GBP on rent a year is annoying I know, however at least you can "pull out" of a rental contract, you cant pull out of a 6% mortgage with 25 year term on a property that is half built with a broke developer!
This is just my own opinion. Take any advice you need.
Cheers
I have been here 10 years and if you want my "opinion" only, I would say a resounding no. I would personally say this for the following reasons:
- For many areas the prices now are more than they were back in the highs of 2007. To me, that rings bells. Take that how you will, however as an example, you could have bought a 2 bed flat in the Marina last year for 1.8 and now its 2.6 for the same apartment. (I have some particular units in mind) The price on Houses in the Arabian Ranches has gone crazy again and the same 3 bed house 2 years ago was around 3.2 million and is now apparently selling for 5.4 or there about's.
- I believe that some are buying, no doubt, however with the change in transfer fees to 4% (from 2%) and the Loan To Value Ratio which banks can offer, I believe this will cool somewhat and the spurt of buying which happened in the last 6 months will slow considerably.
- Emaar are literally launching a new development every week and with the other properties going up in a similar fashion it very much reminds me of what hapenned last time. Real Estate Agents are pushing up prices in a bid to win business/listings from owners and most buyers are panicking. I believe most "Investors" dried up months ago as there aren't many margins. Many may well be taking some risks based on what they think will come to fruition based on location, however that is a risky game unless you have cash to risk.
Of course, many well known analysts say that if you are an end user buying a property to live in then it doesn't matter so much about prices as its your home and fluctuations wont make a difference because if you are not planning to sell then it doesnt affect you anyway. (Until of course you maybe need to sell)
Should you decide yourself then fair enough, a little advice what I would personally do:
- In Dubai (just as elsewhere) location is key. Personally, if I were buying an apartment I would buy in the Marina - Near to Beach...but not JBR. and if it were a house I would buy in Arabian Ranches. There are a few other reasonable developments now, how the ranches is by far the most established and good quality. (This is where we are)
- I second what others say, always buy a COMPLETED place. Not offplan. I can see the sh#t hitting the fan again with some developers and you will be left stranded with paying the mortgage and battling with the developer and bank. Seen it scores over after the crisis. Besides, there are so many damn villas and apartments there really is no need to buy off plan.
- I would swerve any Expo 2020 developments. Show me one major development around the world which has breathed life into a certain area in the long term.
All in all, personally, I would wait till the dust settles. Property markets are cyclical around every 5 years or so and I have the feeling that in about 2 years or so the prices will correct. 1 million aed on a villa is let's not forget around £180,000 and that's a chunk of change. Of course, rental rates are a factor if you are living here and spanking 20-50k GBP on rent a year is annoying I know, however at least you can "pull out" of a rental contract, you cant pull out of a 6% mortgage with 25 year term on a property that is half built with a broke developer!
This is just my own opinion. Take any advice you need.
Cheers
If I were to buy here, I would buy Emaar offplan, kinda kicking myself I didn't buy in Panorama in Greens, launch price was pretty good.
Then you do the sums, 1 bed villa I am in now is circa £300k, compare it to what I can buy in UK for the same and it's just a no brainer, we're planning to buy there by the end of the year, commuter belt somewhere up North.
Edit for wrong amount
Then you do the sums, 1 bed villa I am in now is circa £300k, compare it to what I can buy in UK for the same and it's just a no brainer, we're planning to buy there by the end of the year, commuter belt somewhere up North.
Edit for wrong amount
Edited by dxbtiger on Monday 3rd March 14:14
This is my second project in Dubai and after my first 3 year stint I left just at the start of the crash. I rented then as I do now and during the heady 3 years leading up to the bubble bursting we witnessed a self perpetuating property price spiral fuelled by speculative off plan investments. My colleague at the time had three plots purchased off plan and he enjoyed constantly reminding me of the missed opportunity as his 'investments' accumulated at 20-30% returns in 6 months - all seemed to good to be true but there were many success stories to reinforce the behaviour. However when the bubble finally burst and there was a market correction, he amongst others, were left with with very expensive plots of sand - or promises there of - with little legal recourse. His most expensive mistake was 'The Lagoons' which I am sure I have seen a recent advert for again. After the last crash everyone thought we would have learnt the lessons but there are increasingly signs of Groundhog Day in the current market.
Hopefully I have another 4-5 years here on this new project so I again face the same question as you pose... do I burn away say £30k a year on rental fees or put that to work against a mortgage and buy.
I choose the latter, my own rationale being;
1) I do not see the market fundamentals being different now to 5 years ago
2) Everyone seems in agreement that the current price pressure derives from the influx of investment from those countries impacted by the Arab Spring - Dubai still being a relatively safe haven
3) The sheer volume of new builds has an impact I find difficult to quantify - I live on The Villa and just in the Villa/Falcon City/Arabian Ranches triangle there is a huge potential supply of new builds in the pipeline that no doubt are being carefully orchestrated on delivery times to ensure the prices are being 'optimised'
It all depends on your personal position and your appetite for risk in your investment portfolio, if you are in your thirties, cash rich and can afford to take a few risks and accept a few failures then a punt in the Dubai market might be worth it on the speculative end of your investments. If like me you have family commitments, at a stage in life were your investments have to be less speculative and you cannot afford to risk a 30%-40% deposit - then you may choose, as I have done, to make your £££ work for you in a more regulatory reliable environment in Europe. The legal ownership issues, the ongoing political environment of the Gulf region and the current hype around 2020 etc all make me less inclined to buy.
Each to his own... and my admiration to those of you who have taken the plunge and done well.
Hopefully I have another 4-5 years here on this new project so I again face the same question as you pose... do I burn away say £30k a year on rental fees or put that to work against a mortgage and buy.
I choose the latter, my own rationale being;
1) I do not see the market fundamentals being different now to 5 years ago
2) Everyone seems in agreement that the current price pressure derives from the influx of investment from those countries impacted by the Arab Spring - Dubai still being a relatively safe haven
3) The sheer volume of new builds has an impact I find difficult to quantify - I live on The Villa and just in the Villa/Falcon City/Arabian Ranches triangle there is a huge potential supply of new builds in the pipeline that no doubt are being carefully orchestrated on delivery times to ensure the prices are being 'optimised'
It all depends on your personal position and your appetite for risk in your investment portfolio, if you are in your thirties, cash rich and can afford to take a few risks and accept a few failures then a punt in the Dubai market might be worth it on the speculative end of your investments. If like me you have family commitments, at a stage in life were your investments have to be less speculative and you cannot afford to risk a 30%-40% deposit - then you may choose, as I have done, to make your £££ work for you in a more regulatory reliable environment in Europe. The legal ownership issues, the ongoing political environment of the Gulf region and the current hype around 2020 etc all make me less inclined to buy.
Each to his own... and my admiration to those of you who have taken the plunge and done well.
dbxtiger.... healthcare projects, fortunately not property...
Chilli.... I understand your frustrations, when I first looked at the Villa when I arrived 2 years ago the prices were going for 155/160k, now they are knocking around 210k... as you say madness. Particularly when my plot is not even landscaped and still feels like a building site... think it will be a decent development when its eventually finished!
Chilli.... I understand your frustrations, when I first looked at the Villa when I arrived 2 years ago the prices were going for 155/160k, now they are knocking around 210k... as you say madness. Particularly when my plot is not even landscaped and still feels like a building site... think it will be a decent development when its eventually finished!
IanUAE said:
Kieran,
Did you / do work in health care and did you used to drive a dark coloured Jeep? Apologies if not as I used to know somebody called Kieran who did.
Ian... you have me worried now, never been stalked before Did you / do work in health care and did you used to drive a dark coloured Jeep? Apologies if not as I used to know somebody called Kieran who did.
I did indeed have a black Jeep, stranded many times in the dunes, did our paths cross before? positively I hope !i agree with kieran, although the time to buy was 12mths ago for the big gains.
if you have the deposit, then it is cheaper in a lot of areas to buy rather than rent. i also agree with the funding for this latest rise has come from an influx of islamic middle class 'refugees' who will be living in these properties rather than renting as per the western speculators who funded the last bubble. there has been a noticeable increase in the resident population, the petrol station queuing being the easy indicator and new buildings in popular areas filling fast.
many companies, including my employer, are reviewing their housing allowance policy for the first time in aeons. there is an expectation that rents will remain high and renters will pay if it is coming out of an enhanced package rather than their own pocket.
my property lawyer friends are buying for these reasons. one of whom i have known 15yrs+ and is very conservative/astute in his financial dealings.
if you have the deposit, then it is cheaper in a lot of areas to buy rather than rent. i also agree with the funding for this latest rise has come from an influx of islamic middle class 'refugees' who will be living in these properties rather than renting as per the western speculators who funded the last bubble. there has been a noticeable increase in the resident population, the petrol station queuing being the easy indicator and new buildings in popular areas filling fast.
many companies, including my employer, are reviewing their housing allowance policy for the first time in aeons. there is an expectation that rents will remain high and renters will pay if it is coming out of an enhanced package rather than their own pocket.
my property lawyer friends are buying for these reasons. one of whom i have known 15yrs+ and is very conservative/astute in his financial dealings.
Kieran said:
Ian... you have me worried now, never been stalked before I did indeed have a black Jeep, stranded many times in the dunes, did our paths cross before? positively I hope !
Sounds like we most definitely did cross paths before, Dubai 4x4 and I have picture of me digging you out after you crested (Al Awir -Fossil Rock). I used to have a silver Pathfinder. I did indeed have a black Jeep, stranded many times in the dunes, did our paths cross before? positively I hope !Small world Ian, how could I have forgotten, I remember spending more time digging out sand than driving that day! That was back in 2008, you must be a veteran of the dunes by now. Would be good to catch up, are you on the same work email address? My current LR3 will probably be worse than the Wrangler but keen to give it a go some time.
Good to hear from you.
Good to hear from you.
That's a very good point Yorky.
Arabian ranches is 1.5aed per Sq ft. (one point five)
Dubai marina average is around 12 to 14aed per Sq ft
Around Burj Khalifa is around 25 to 30aed per Sq ft.
Suffice to say. There are massive differences. I think the "downtown" Burj Khalifa area is the highest... And when you also consider that you don't get swimming pools and I think also gym access I'm many if the main Emaar developments it's a but steep.
Anyways. Do your research eh.
Arabian ranches is 1.5aed per Sq ft. (one point five)
Dubai marina average is around 12 to 14aed per Sq ft
Around Burj Khalifa is around 25 to 30aed per Sq ft.
Suffice to say. There are massive differences. I think the "downtown" Burj Khalifa area is the highest... And when you also consider that you don't get swimming pools and I think also gym access I'm many if the main Emaar developments it's a but steep.
Anyways. Do your research eh.
That's a very good point Yorky.
Arabian ranches is 1.5aed per Sq ft. (one point five)
Dubai marina average is around 12 to 14aed per Sq ft
Around Burj Khalifa is around 25 to 30aed per Sq ft.
Suffice to say. There are massive differences. I think the "downtown" Burj Khalifa area is the highest... And when you also consider that you don't get swimming pools and I think also gym access I'm many if the main Emaar developments it's a but steep.
Anyways. Do your research eh.
Arabian ranches is 1.5aed per Sq ft. (one point five)
Dubai marina average is around 12 to 14aed per Sq ft
Around Burj Khalifa is around 25 to 30aed per Sq ft.
Suffice to say. There are massive differences. I think the "downtown" Burj Khalifa area is the highest... And when you also consider that you don't get swimming pools and I think also gym access I'm many if the main Emaar developments it's a but steep.
Anyways. Do your research eh.
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