The UAE or I should correctly say that DUBAI is seriously struggling. For example a villa which only 3 months ago would sell for 3.5 million dirhams can be bought for 1.6 million right now. Last month local radio reported that over 2200 people defaulted on their car payments and had their vehicles confiscated. So many people are just leaving everything behind including their debts and jumping on a plane and heading home. I've read a report that thousands of cars on finance have been abandonned in the airport car park. In most parts of Dubai rent of properties in freehold areas which are areas open for foreign ownership has dropped by about 50 percent. In my opinion the worst is still to come. But anybody with a right mind could see it coming Dubai was unbelievably overpriced. Should potential new investors put their money in Dubai now that it has reached a sensible level? in my opinion not yet because the worst is yet to come. More people will lose their jobs and homes, more companies will shut down and more people will be forced to take unpaid leave. You can literally see in people's faces the stress and the fear of being unemployed. That same stretch of road that used to take 35 minutes in the morning to cover only takes about 16 to 21 nowadays. This financial crisis has seriously affected the foreign investors, especially the ones that were in it for a quick buck and had no real expertise in the real estate business and there are many. they stand to lose everything as they are struggling to keep up repayments on mortgages and do not have the capital to ride the storm and wait for calmer weather which might take up to two years to fully recover according to some people.
Heh... see how this article puts a positive spin on the matter; http://gulfnews.com/business/Construction/10282633.html
Everyone needs to stop panicking. Its horrid there yes, but its exactly the kind of people who are running away that messed up the place to begin with. Quick in/out investors. And ofcourse the regulating authorities (Who apparently didn't do their job) are to blame as well. They kept getting the investors and they forgot the word sustainable economy. The word I'm looking for is 'cluster****'. They do have substantial assets that might come in handy eventually. Although personally, I'll still be standing behind the place at the end of the day. We've been there since the 70's, through the thick and thin. I'll be praying/wishing/hoping for a recovery, which doesn't look easy, so lets see what the future holds.
The Gulf News is not worth the cheap paper its printed on. I love how they talk down the impact of the global crisis on Dubai and right beside it, provide details of the downturn in the US and UK. IMO, the business/people that focused on efficiency and investing based on Value, not speculation will ride out the storm. I for one am glad that some greedy people got Burned. If you're stupid enough to buy a villa for 10 Million AED hoping to flip it and make a easy million, you deserve it. Most of the Palm villa's were not worth the asking prices. As the age old saying goes, a fool and their money are soon departed. I've met plenty of people who sold off their assets at the peak of the property craze after they received foolish (high) offers.
Will Dubai's real estate sector suffer in this economic downturn? Definitely. It has already suffered, and will continue to suffer even more given the credit crunch. Buyers now cant get credit from banks to buy real estate. Pure economics: lots of supply, little demand, even at times when the economy was good. Everybody saw it coming. It was a speculative buyer's market. Buying a villa for 5 million Dhs with a 5% downpayment and flipping it for double within a year before making any further payments was ridiculous. But I genuinely believe that Dubai has set itself apart from the rest of the region in creating a name for itself as one of the major global tourist destinations. Sure it's "fake" and "ostentatious" to some, but to others, its a desert oasis. Great hotels on white sandy beaches, good shopping, lots of attractions. I think Dubai will pull itself out of the hole it dug over the last years. Abu Dhabi is always there to help out, though at a hefty price supposedly. We've all heard the possibility of Emirates Airlines, Etisalat, DP World, and even Jebel Ali changing hands in exchange for paying off Dubai's debt. Real estate prices will continue to drop dramatically, hotel room prices will drop as well, but people will still want to visit the place. At least I would.
I'm still amazed by what Limitless Group does... and i do agree for A.D. Seems they are very pragmatic.
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