The ongoing financial crisis has hit Dubai hard and the rather silly approach being taken by the authorities is to pump out press release after press release claiming that there is not a problem. We have gone through phases with these press releases. First – there was no problem and Dubai was immune to the downturn. Then, Dubai was affected, but only slightly, next up – OK, Dubai has a problem, but we are now at bottom.
Yet another law suit in the offing as yet another UAE developer decides the small print means “no deal” on a “guaranteed” offer. It appears that the larger developers really do think small investors are good for one thing only. I have long been of the opinion that the shoddy treatment of smaller investors will backfire on the UAE as and when there is a turn around in the market.An investor in Ajman-based BSEL Infrastructure Realty’s Pearl Tower is seeking 12 per cent interest on his principal amount as assured by the developer under his buyback offer.
Or 9% !!!!!!!!!!!!!! or 30%!!!!!!!!!!
More bad news from Dubai. According the the Financial Times, Property prices in Dubai only jumped 7 percent in one quarter as “demand revived” and “lending conditions eased.” Quite who is expected to believe this sort of nonsense is beyond me.
Abu Dhabi, the capital and the second largest city in United Arab Emirates, has recently witnessed a series of rapid developments. The economy, which is mainly dependant on hydrocarbons for its economic wealth, has one of the highest GDP per capitas in the world. Abu Dhabi also has the largest share of oil reserves in the UAE; 95% of oil reserves and 92% of the gas. In order to diversify its economy, the UAE government has taken large steps to encourage oil revenue investments in manufacturing, tourism, agricultural and real estate industries to limit its dependence on the finite resource of oil.
With the end of Cityscape Dubai, Nakheel is planning on another 500 job losses according to “The Independent,” newspaper.
Nakheel, the state-owned Dubai property group that was responsible for the iconic Palm Jumeirah artificial island, is set to make as many as 500 redundancies now that the Emirate’s “Cityscape Dubai 2009″ show is over. Announcements are expected in the next few days, a consequence of fallout from the global financial crisis. Dubai property values have fallen 50 per cent in a year. The company said last night: “Nakheel continues to evaluate its projects and commitments against market conditions and opportunities. In doing so, the company also evaluates its cost base and efficiencies.” Ratings agency Standard & Poor’s said Dubai needs to raise another $10bn (£6.3bn) for its economic support fund, to prop up government-related companies. The independent.
I am slowly coming to the conclusion that the governments and news media think all potential readers are morons. According to this ridiculous press release disguised as journalism, Emirates Business says:
More on Dubai Property Prices Rise Thirty Percent!!!!!!!!!!!!!
According to a recent report by Colliers International, property prices in Dubai will fall even further over the next 18 months and will not start to increase for the foreseeable future. 71% of developers polled stated that property prices had not yet bottomed out.
One area not to be involved in property investment at the moment is the Dubai commercial property market. With businesses cutting back, firing staff all over and an estimated 3 million square meters to enter the market over the next two years, rents will have only one place to go – down.
Thinking of buying investment property in Dubai? Look at the foreclosures when they start happening. The amount of loan defaults across the UAE continues climbing and the banks are considering repossessions as a way of balancing their books. With property prices in Dubai down as much as 70%, and thousands more new properties still entering the market place one would have expected a few bargains to be had. But – lacklustre auctions and developers holding vast stocks are keeping prices from properly correcting.
More on Buying Investment Property in Dubai Foreclosures Might Be The Answer
This year’s CityScape in Dubai is forcing the industry to face a few harsh realities. Duding the run up to the exhibition, all the major Dubai property developers pulled out, including Nakheel, Emaar and Limitless, although Emaar and Nakheel were touted as “Foundation Sponsors,” and the 2009 exhibitor list on CityScape’s website is still empty. The amount of exhibitors is well down and the usual, “XXX Billion Dirham development!” announcements have been somewhat lacking. I don’t think anyone could have swallowed that this year.
