Hello dear readers
What are your thoughts regarding the current rental situation for property- as opposed to advertised market rates in Dubai?
Apparently, there is a discrepancy between advertised rental rates and actual paid amounts for the same properties. Does this hold true, according to your experiences?
“Bubble burst” is always a term related to a thriving property market – do you readers expect such a phenomenon in the local market, or is this just speculation?
Nachhaltiger Ökotourismus in den VAE
3 days ago
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14 comments:
It's always speculation, guesswork. No-one can predict the future with any certainty, and that applies to property markets anywhere, not just Dubai.
My guess is that we won't see a collapse in Dubai's property market. We have 800 people a day moving here, we have no office space available and huge waiting lists for it from businesses either wanting to move here or to expand.
There's also the areas of property we haven't even started here yet - time-share and retirement for example. Northern Europeans in particular are retiring to the sun - places like Spain, south of France. That's an as-yet untapped market for Dubai in a few years time. Time share is a multi-billion dollar segmant world-wide, and again it's untapped by Dubai.
Retirement condos. Great idea!
Thanks seabee.
There are huge differences between what people actually pay and what new units rent for.
It's interesting to watch the housing prices on sites like www.housing.ae that list properties from numerous agencies, if you watch long enough, it seems like there is one agency in particular that forces the price up. You can find properties that are exactly the same in the same area / development by different agencies for 20% cheaper at times.
Also, where I live for example, if someone was to rent the exact same apartment today the price would be 3-4 times what we pay, this is due to my wife living here for a number of years.
Personally I would like to move, but it would mean moving out of Dubai to another Emirate if I wanted something on par with where we live now in Barsha, we're getting priced out of the market. I own my own company and do quite well, back in Canada I would be considered quite well off, but here because I don't have a employer subsidizing my cost of living The UAE is becoming a less and less attractive place to live.
I think that eventually the real estate market will be forced to into correction, for all the talk of demand out stripping supply is largely artificial, people will stop coming if the cost of living is excessive, and any instability in the region has the potential to flatten the market.
*seabee - I do agree, though perhaps not wholeheartedly, that it is indeed a matter of speculation. I can't disagree with your points, esp. since business is thriving in Dubai, but I do feel that a kind of "wave" is developing that might see expats moving out of Dubai because the cost of living has come to exceed income for many.
*smith, thanks for the website link - I'll check it out.
I would like to see some more comments to gain an idea of the 'real' market out there - it seems to me, what ppl pay is far less than the advertised rate, regardless if they are longstanding tenants or new ones - these days one won't find many tenants who live in a property for 3+ years if their landlord is clever - if they are evicted, they won't be able to find a similar prop @ a similar rent.
Although I agree fully with your theory in your last paragraph, the current economic situation in Dubai has demonstrated upward growth, and this is the way it will continue for a while yet.
'and this is the way it will continue for a while yet.'
Not if there’s a conflict in the near or not too distant future, courtesy of a rebel with a cause.
In that case, there’d be a lot of housing with no takers.
Of course, that's by a long shot but anything's possible given the current political scenario unfolding in this region.
I dont understand how Dubai can build so many high rise buildings and fill them up with people. where are these people coming from.
Abdul
getDubaitickets.com
Seabee
How abt Retirement City then?
Demand will continue to outstrip supply for many years to come.
The main reason is that most projects under construction are delayed due to either shortage of material or resources or both, and those in the design and tender stages pushing up are also delayed by shortage of available contractors' resources.
Consequently, salaries, especially in construction, transport and other related industries, are going through the roof - allowing new people to rent at ridiculous prices. Companies have no choice other than pay up because they desperately need the people - the consensus being that salaries will go down again as soon as rents do. Fat chance.
Only about 50 to 60 thousand units will enter the market this year to my knowledge, and next year maybe a few thousand more. Compare that to the approx. 12K families that move to Dubai every month - less than one third that number leave over the same period = this gives a net population growth of 90-100K family entities per year. (Many of whom have no intention of living in JBR next to Russian hookers on the 30th floor, instead putting pressure on the villa market and low rise developments.)
Don't worry about the bubble bursting. It'll just soften a little around the edges (highrise apartments which nobody wants).
As long as Dubai is the only viable place in the entire Arab world - and India for some time to come -, where one can live in relative affluence and comfort without powercuts and water shortages and without the bother of Muslim fanatics or without contracting dysentery or catching a bullet every so often, and as long as those defeatist and fucking PC western governments in countries like the UK continue to punish its middle classes for being white and middle class, and tax them to death - thousands will continue to move here.
Even if it is only for a few years - it is a continuous stream that will continue to raise demand for acceptable housing, and accept the unacceptable rents as well.
You haven't got it yet, have you? Dubai in twenty years from now will be a cut-throat megalopolis like Bangkok or Cairo or Mumbai - but hopefully with Singaporean infrastructure. But don’t hold your breadth.
How about this from my home town, in today's Sydney Morning Herald:
One in five Sydneysiders are so sick of traffic and the high cost of living they are considering moving to another city.
And in a blow to Sydney's creative energy, NSW is falling behind the rest of Australia as people in artistic and cultural jobs abandon the state.
Seabea, I heard Sydney was voted the best city in the world couple of days ago?
Real Nick, I wholeheartedly wish all the taxes on English men be lifted very soon…
We got what is worst than this bubble. The bubble would be a bliss actually.
I don't know if the bubble will burst, but I know that I won't take the risk to buy anything here. I'd rather put it in old stone somewhere in Europe where the expected appreciation will be less but stable.
Most newly arrived western expats (bunch of UK guys coincidently) came here with a dream of cheap living, easy money, villa by the beach and realized that for the asked price you get much inferior quality of living than in Europe. Some even realized that they can save more in the UK even after being slammed by the taxes. In short the average duration of stay is shortening.
Some Indian companies can now afford to offer more competitive package than Dubai for a lot of positions. Go find a chartered accountant nowadays. And if you employ one... well.. take care of him or he might not stay very long as those companies are heavily recruiting in Dxb. The steady stream of cheap qualified Indians is slowly drying up.
Philippines government is planning to institute a minimum salary for OFW. That shouldn't help those who rely on 850dhs a month hospitality workers. And anyway with what the dollar (or AED) is worth right now, it doesn't make much sense to come here anymore.
(Real salary from 5 star hotel for a front desk receptionist, I didn't pull that one out of my *a*).
I have recently helped 3 companies set-up in the UAE. Well, guess what after a very simple market study they have set-up their office in Ajman. 60k rent instead of 350k for the same office space/quality, much easier to find/afford decent staff accommodations and you avoid the commute nightmare. And the Ajman gov is quite tolerant and offers nice packages.
Even my own company is now looking at alternative countries, Bahrain (Which was the big business hub before political instability chased the businesses to Dubai) is looking more attractive every time the government pulls a stunt like doubling our electricity bill.
(No I'm not working for Microsoft)
Oman is also actively looking for investment and has a much less "suck it or leave it" attitude than Dxb. Not right at the center though.
So in the end I do think that the market will readjust to the real value, it might take a while, or it may be a sudden explosion, or might simply go through a readjustment of the overall salaries of the low to middle class who are the one really suffering right now.
my 2fils
anon @1.42, that's very true. But it isn't all milk & honey 'back home' as today's story in The Times shows in the UK:
"The average household is £5 a week worse off than last year. The cost of living rose by 4.9 per cent to £388 a week. Earnings also increased but soaring bills for essentials such as food and transport mean that disposable income has fallen to £138 a week...The average family has £45 a week to spend on leisure and recreation once weekly bills are met...It is estimated that 1.4 million people will face higher mortgage bills when their fixed-rate deals end this year. The average increase will be £100 a month...Millions of Britons who are struggling to pay their heating bills could apply for discount vouchers under government plans for a nationwide fuel poverty scheme."
Stories here.
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