Thinking of buying an investment property in Dubai? Wait and see is our best advice right now. The credit crunch is having a big impact in the UAE, and particularly in Dubai, where many ex-pats went to work in the construction and real estate sector, only to discover they had 30 days to find another job or get out of the country when their job vanished along with the rest of the credit market.
Small investors in Dubai are forming groups, in an efforts to get their voice heard by the developers. Most developers are simply ignoring contact from individual investors and vigorously pursuing payments on off-plan developments that are now worth a fraction of their original sales prices. The new interpretation of existing laws by RERA in November 2008 no longer protect them if they default on payments.
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Developers in Dubai are beginning to face the same issues as other property developers around the world. Falling prices and dried up credit means that customers are not so keen to pay for off-plan developments that are now worth considerably less than the agreed prices.
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Some time ago, we wrote a post suggesting that Dubai’s growth was unsustainable, and that a crash was inevitable. This seems to have upset a few people, judging from some of the comments. Certain people feel that this was a personal attack on the people of Dubai rather than a prediction for investors to take heed of. This is a choice selection of comments:
The Central Bank of the UAE has just bought $10 billion of the $20 billion long-term bonds Dubai issued on Sunday. The five-year bonds pay 4% per year.
“This is a clear step from the central government to back up Dubai,” said Khald Masri, a partner in Rasmala Investment, a very active investment bank in the region. “The central government’s step will help ease the tense situation in the local economy and markets.”
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Once again, more downs than ups in the property investing markets.
- Emaar properties, Dubai-based owner of John Laing Homes have filed for bankruptcy protection for the American firm. John Laing Homes is one of the largest home builders in the United States and the 31st biggest in the world. Or at least – they were. Luxury property blog.
The Dubai International Property Show opened today with almost “no visitors” according to Property wire.
‘These are the difficult times and we must admit the reality and then find the solution,’ said Abdullah M Al Shizawi, managing partner of Heart of Capital.
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Yet another Dubai property developer is in a position of being unable to repay small investors after canceling or delaying a project. This time, “Aspire Real Estate” has been forced to hand their “Jehaan” project over to a third party after numerous investor complaints and bounced cheques.
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A few moves are being made to ease investor’s concerns over the dubious practices by developers and the growing dissatisfaction with the way things are being handled when developers cancel or delay projects in Dubai. Property buyers can contest their “terminated” off-plan contracts, signed after August 31, 2008, in the newly set-up Property Court, but will have to go through the Dubai Land Department (DLD),.
The global downturn has turned dreams to nightmares for many expats in Dubai. Dubai developers are shedding staff as fast as orders and projects are canceled. Unfortunately, what this means for many is a hasty retreat from the country. As soon as a redundancy notice is issued, work visas are canceled, which means one month to get out of the country.
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