below is an article from moneyweek on the problems facing dubai - the massive oversupply of new build - the failure to invest in the infrastructure to support it - and the struggle to resell completed properties

Dubai Property - Moneyweek Article

hey thats a good article, thanks for that

confirms many of my worst suspicions about Dubai

basically its just a friggin desert - without cheap oil the place is screwed

I disagree..... Dubai is and will stay a strong investment. You wont see easy money like before, no more buying and selling a few months later to make bomb. But long term it will last. Compared to the UK market where you'll be lucky to achieve 5 or 6% rental yeilds, Dubai will still give you between 10-12% yeilds. I imagine this percentage to slide as more property becomes available throughout the next 2 years. But even if it slides to 8% its still far better than the UK, and don't forget there is no tax unlike the UK!

Dubai will stabilise over the next 2-3 years and should level off and provide a safe sensible return for your money. To avoid problems be sure to invest in the right places in Dubai. The Palm will always be in demand, but if money is a problem I suggest the marina to be a safe bet. Situated right by internet city and media city. Best place to be for corporate lets.

Sports City I would avoid.

GASMAN,

What do you mean, "there is no tax" ?.

If you are UK resident for tax purposes you are liable for tax on all your earnings/capital gains, wherever in the world obtained, and regardless of whether or not you remit them to UK

A recent review of the Burj El Arab on Tripadvisor - says it all

''We arrived at the Burj, nobody met our car or welcomed us even though a group of doormen were standing laughing and joking with each other. We walked in, had to find our own way to the elevators with no clear signage to the cocktail bar and no one in sight to assist.

In the sky view bar we were unable to sit anywhere with a "view" let alone a Sky View and the seating next to the windows prevented us from even a standing view.

A large group of footballers were completely ignoring the supposed dress code lounging around in jeans and trainers, a guy behind us was ringing people in england bragging it was his 40th birthday and yes guess what, he was in the buuurrrjjj!

The decor throughout was psychadelic and whilst the outside is iconic, the inside is lavish to the point of being tacky

We were served a selection of canapes as part of our package which were totally prepackaged and could have been straight out of Tesco's, nothing 7 star there

On leaving we were confronted with a horde of hooray's leaving the ball room, one drunk girl turning to us and saying oooh yooo tooo - is she yooouuur looveer or yer wife? It said it all we found the place to be full of footballers, chavs, trust fund kids, toffs etc.''

I'm sorry but using the above holiday tale as a reason not to invest in Dubai property is nothing short of laughable.

Gasman is right on the money with his comments about Dubai. Although the 'no tax' only holds true if you are resident in Dubai.

OOPS!

All roads lead ultimatley to rome including the monopoly annointed government developers who were given free of charge all the land they have developed or sold to others to develop. Now they are trying to fullfill the hype and promises . Living near the marina I can only say its a monstrosity of concrete where tower blocks look on to tower blocks. Unfortunately there is no recourse to complain, owners are held hostage to 'maintenance charges' and have still no freehold rights, buyers need to put up with dubious practices from so called agents. There is no second hand market, no transparency in costs or prices, volume of sales etc or defined laws for property rights. Try suing Emaar or Nakheel in the Dubai courts. They developments are ill thought out, had no environmental or infrastructure planning, disregarded basic human rights in their construction and although were initially costed at roughly 110 - 220 dhs per sq ft failed to build in rampant inflation due to unbridled development. I believe contractors are now working within 500+. The palm and the world is an example of how things can go very wrong. The stock market is the worse performing stock market in the world falling from 1000+ to 400 since January, Emaars shares are now trading at about 10 Dhs from heady hights of 50 Dhs. Interest rates are on the rise around the world and inflation is double figures in Dubai. I believe those who got in early as always will win but anyone going in now specifically in flats/apartments will find better returns elsewhere. As always buyer beware.

Jesus Christ - in ten years time this place will be a monumental lesson in everything that can go wrong in construction speculation on a massive scale - the place will be the biggest concrete ghost town in the world - seriously who the fcuk is gonna live in all these apartments & villas?

Cue tumbleweed....

The World

I like a risk (Morocco) but Dubai would cause me to sh1t myself.

Hundreds of thousands of newbie investors all expecting a queue of tenants in the next couple of years as the developments complete!

Even Palm Island I wouldnt touch. The whole thing built on sand. Multiple shopping centres and tower blocks on this sandy base in an active seismic area - yikes!

To me its the hieght of gaudy chintz. Totally fake ott monstrous carbuncle.

Dubai was a play a few years back. If youre still in now, sell quickly and move into virgin markets.

The Financial Express
Thursday August 10th 2006

Homes on Dubai's palm island being readied for first residents

8/10/2006

WITH 14,000 labourers toiling day and night, the first of Dubai's three palm-shaped islands is finally about to get its first residents.
The Palm Jumeirah, a 31-square-kilometre (12-square-mile) island group, is part of what's billed as the largest land-reclamation project in the world, involving the hauling of millions of tonnes of Gulf sand and quarried rock over five years.
On Nov. 30, the palm will open to some 4,000 residents, said Issam Kazim, a spokesman for Dubai's state-owned developer Nakheel.
When fully complete by 2010, the Palm Jumeirah will be an offshore city, with some 60,000 residents and at least 50,000 workers in 32 hotels and dozens of shops and attractions, according to Nakheel.
Observers say they are surprised that the fledgling developer has been able to build such a complex project more or less as planned, albeit with several snags that delayed the opening from last year.
"The project has captured people's imagination," said Colin Foreman of the Middle East Economic Digest. "Nothing like it has been done anywhere else in the world."
Nakheel's four island projects, the world's largest land reclamation effort, are reshaping Dubai's stretch of the Gulf coast.
The US$14 billion (euro10.9 billion) project is a key part of this booming city's ambitions to rival Singapore and Hong Kong as a business hub and surpass Las Vegas as a leisure capital.
The frenetic pace of development has utterly transformed Dubai from a sleepy trading and pearl-diving village in the 1950s to a flashy metropolis of 1.5 million.
The island's construction has not all been smooth, and most buyers were supposed to get keys to their island homes a year ago.
Some of the new land sank and Nakheel needed an extra year to add more sand and pack it with vibrating land compactors, Kazim said.
Reports from those who have wandered through the island's giant homes describe them as cheaply finished and set uncomfortably close to one another. Nakheel rejected an Associated Press request to visit the island.
Overburdened roads in Dubai's Jumeirah Beach neighbourhood are expected to clog further as people begin moving onto the island, accessible, for now, by a single bridge. Mainlanders have already put up with years of road works and innumerable trucks hauling boulders to the island.
Those moving onto the Palm Jumeirah this year will have to live with construction for another three years, and then an influx of tourists. Most of the owners are foreigners, with Britons making up the largest group, Kazim said.
Many observers believe Dubai's frenetic home-building will soon outstrip demand.
"We've still got a shortage of properties in Dubai, but that's likely to become an excess in next six or 12 months," said Steve Brice, an economist with Standard Chartered Bank in Dubai.
Brice said year-old estimates that 50,000 housing units would hit the market in 2006 will be more than doubled. Nakheel, one of three big developers here, has said it will release 60,000 units in the second half of 2006 alone.
Nakheel's two copycat Palms, the Palm Jebel Ali and Palm Deira, have also been delayed by design changes and other factors, Kazim said. A nearly finished fourth Nakheel archipelago, shaped like a map of the world, has attracted few buyers and remains mostly unsold.
Kazim said The World's sales trouble stems from simple economics:
Nakheel is selling empty islands for tens of millions of dollars (euros) only to builders promising low-density luxury.
Dubai's government expects the Palm Jumeirah to become a signature tourist attraction, bringing in as many as 20,000 daily visitors, Kazim said.
Meanwhile, labourers living in a cruise ship moored offshore are scrambling to finish enormous concrete houses that are crammed together on the palm island's 17 "fronds."
The fronds are narrow peninsulas as long as 1.6 kilometers (a mile), attached to the island's main trunk. Nakheel will hand keys to owners of 1,350 homes by Nov. 30, Kazim said.
Also nearing completion are 2,650 apartments in 20 high-rises that have sprung up on the island's trunk. T
he hulking complexes are visible from shore, where the sprawling island, with its dredges, highway overpasses and construction cranes has become a major eyesore for resort hotels on Dubai's once idyllic natural beaches.
Even after the handover in November, less than half of the island's construction will be finished. Kazim said the project won't be done until nearly 2010, if things go according to Nakheel's current schedule.
The 1,500 room Atlantis Hotel is already under construction by South Africa and Dubai-owned Kerzner International, and is expected to be finished in 2009.
The hotel will be similar to its Atlantis hotel in The Bahamas.
A redesigned Trump Hotel and Tower on the island is also expected to open sometime in 2009, Kazim said.

FFS - the only people making any money from this S-Hole in the sand are a)the government & b)developers who got in at the start - small time wannabe flippers are just gonna get their nuts roasted.

Without cheap oil? Oil only accounts for about 6% of Dubai's GDP ......Oh, and it ain't cheap at $75!

It is far from just a desert, it has huge potential with millions of cash rich tourists and investors in very close proximity........

Will it succeed? Who knows, but those who are quick to say it can't should look back over the past 30 years and will read very similar -ve comments about other projects undertaken by the Dubai Government.

There are way way too many developments compared to the number of indigenous people.
After the construction boom many thousands will leave.
Already there are new developments standing empty or nearly empty.
Developers have to shake a few friendly sheiks to buy lots just to con a few new investors that the place will take off.
Dont touch it with a barge-pole.

Dubai is a very complex and emerging market, some of the views expressed here have been rather simplistic, it is difficult to directly equate the Dubai property market to the UK property market.

Iranians keen to find somewhere to park their cash outside of Iran (but close to home)...... Asians keen to secure residence visas for themselves and extended family through property purchases.........a rapidly expanding economy & population.......a growing tourist destination.......

Is there going to be oversupply? Almost certainly (in apartments anyway). Will there be a correction? Probably, but I doubt it will be on the scale that some here are suggesting.

The MoneyWeek article quotes a source at the Standard Chartered, well here is a briefing from the Standard Chartered:

Standard Chartered: UAE economy supporting Dubai house prices

[I think it's time Desert Knight was banned from this forum. He doesn't seem to realise that you are only allowed to spread doom and gloom!

Well said DK. The Dubai market will undoubtedly correct itself in 2007, but the prices will move upwards again as Dubai continues with its megavision and envisaged population and tourist growth.

Dont All Rush At Once

Quite a few of the prices look a little wacky on this site, maybe that's the reason for the disclaimer, anyway I sent an enquiry!

Disclaimer
Property reference dubaimarina3. Details provided and maintained by Live Dubai, London. The accuracy of this information is not checked by rightmove.co.uk and therefore rightmove.co.uk makes no warranty as to the accuracy or completeness of these details. Additionally, overseas companies and individuals selling property are not generally bound by the same strict laws that UK companies are required to adhere to regarding property descriptions. You should make your own enquiries as to the accuracy of any information or material available from the rightmove.co.uk Website.

DK - why are you getting so shirty - you basically agreed with all my comments on the (now locked) Dubai forum - saying the roads were gridlocked - and you wanted us all to know about your big profits when you bailed out of your villa - wot are you trying to prove?

I'm not trying to prove anything and certainly not getting shirty

I feel that many on the thread have little first hand experience or knowledge of the Dubai property market and are overplaying the impending doom and gloom scenario. My intent is to bring a bit of balance, nothing more.

So Dubai does not have much oil or other natural resources.

And it is trying to build a service-based economy.

Sounds familiar...

What was the outcome my friend?

I was suprised to see this in the paper today.

http://www.7days.ae/2006/08/17/the-tide-is-turning.html


Another good source of information is this blog well written and highlights many of the issues that a closed one ruler country economy throws up.

http://secretdubai.blogspot.com

They haven't responded so far

I am interested in investing in dubai... The prices seem expensive.. dubailand scares me... how in the world will dubai.. be able to pull it off?? and I have a friend.. arabic friend... whose sister lives in dubai.. she is moving back to america because the rents have become to high and the utilities are enormous. She has been in dubai and never speaks arabic.. Wheres that arabian culture.. so loved by people?? And they say it is a bubble waiting to burst.

A person can own property there but how many people will live there accept those from the phillipines and servent type workers.

Still if dubai does pull it off.. with all the tourism and pulling in companies then alot of jobs will develop and I can only see computer nerds rushing to dubai.. Doctors are notoriosly underpaid and in competition with Indian/pakistani docs.. who make about £500 at most a month. And they work harder too.. and don't mind abuse..

I think dubai will take a while before it develops into a promising country..

they still need to lax on all the rules of working, living, and hiring in UAE.

Desert Knight I'm glad you're on here... way to many negative posters going over the same old ground.....

When will people understand that you have to work to make money....reseach, target your market, negitiate the best price you can get, work out your stratergy, have an exit plan. If you can do all this and think you can still make money then go for it.

Dubai is due a rental correction over the next 2 years but thats no state secret. Its overly high due to shortage. Even when corrected the rental figures will stack up way more favourable than the UK I promise!

YOU CAN STILL MAKE MONEY IN DUBAI

Friend - I agree there are many doom mongerers on this site - I for one am not - but I have learnt a lot from this site in the last 2 months - this topic aims to highlight some pretty major issues that Dubai has at the moment which cannot be glossed over

we live in Dubai, here is a list of reasons NOT to invest here

1. Appalling customer service

2. poor build quality - a recent rainstorm flooded two developments and all the walls cracked

3. currently all premiums have to be paid for cash - this is the difference between the off plan price and the profit for the seller. this may change

4. dubai marina will release thousands of apartments by year end, this will hit the prices currently being demanded.

5. developer disdain - you may buy a lovely looking villa/apartment off plan but the developer may change the outlook on a whim....example a) the palm jumeirah was supposed to have a golf course - this was cancelled and more villas built instead, thus anybody who paid for a gold couse view were ripped off villas on the palm are 2 metres apart instead of the design plan of more. c) The springs (think council estate) is now having a 6 lane highway built through the middle.

6. Russian nouveau riche buying whole buildings to launder their money same for Iranians - huge swathes of properties being bought by their oil money thus falsely giving the impression the market is booming. drive by Dubai marina at night and hardly any lights are on.

7. Local greed - rents were capped at 15% rise per year, if you are paying $30,000 a year rent then $4,500 can be added the first year and so on year on year. soon for the first time supply will outstrip demand and prices will tumble - forecast 1-2 years.

The only ever good investment was the green community whereby you could rent for 3 years with a purchase option decided at the onset. needless to say the locals have twigged and realised that this is money they could have for themselves.

Dubai is living on the hype it has created for itsself, not to say in 4-5 years it will not be a bad place to have a second home.

I've a friend who worked as a consultant for the gov in Dubai and one of the business models he helped develop for future growth and sustainability of the Dubai hype wasn't based on European investor money (although this was factored in as a trigger point) but the core future market is to be Arab and Asian.
There are two points here:
1. Why do we have so many rich arabs in Europe?
Because they haven't had the supply to meet their needs near by. Dubai wants to change this and give them what they want within a 2 hour fly time.
2. Where is the new money?
The new money is in China, India and on a smaller scale Pakistan.
Although Dubai is exploiting the cheap labour from these countries at the moment it also recognises that due the the growth in the GDP in these countries, many people will have disposable income in a few years time which has never happened on a huge scale before. (India's middle class is already at 300m people).
Again...give these people what they want within a couple of hours fly time and they will come.
Don't be supprised to hear of thrid world nationals talk about being cash rish and time poor in the near future. Will the fly to Dubailand in a couple of hours or 18 hours to Orlando?

Not really sure about this place, cant make my mind up about it:

in between crazy countries, lots of Russian money?!!? lots of people buying to rent out or gain money, the whole place is a building site.

On the other hand, low crime, clean, could look like 5th element when its done.

Maybe the fact that it's been built by exploiting migrant workers from India and Pakistan might help you make your mind up?

I had bought a couple of 1 bed apartments in dubai marina In jan 2005 (they were resales). Cost me 70K GBP each. They were handed over 2 months ago and I have just rented them out. Firstly the selling price for these are around 110K/115K and they sell quite easily as they are completed apartments. Secondly I am renting them out and achieving a whopping 23% rental yield on them. At this rate I will get back the money I had paid in 4 years! Where else on earth will you get that. Dubai has beeen a great investment for me and I have a aparthotel apartment completing end of this year. Oversupply in 2008 and onwards is probably a worry for people investing now but I belive that in the long run Dubai is a winner - So if you have a 10 year view, I would say go for it

Enjoy while you can, from 2007 Dubai will be overflooded with property. Sell while you can take a good profit.

Suprising that we haven't seen more of this, given the lack of Health and Safety control:

Dubai tower fire injures workers

Dozens of workers have been injured after being trapped by flames in a fire that engulfed a high-rise building under construction in Dubai.
Workers were seen on upper floors waving towels and hanging on to scaffolding as black smoke billowed.

Ambulances and firefighters rushed to the scene. Up to 25 people have been taken to hospital, officials said, with some apparently seriously injured.

The building is one of a cluster being constructed on the Dubai marina.

Witnesses said the fire broke out around 1230 (0730 GMT) and it was some time before the emergency services arrived.

A helicopter was unable to land on the roof, they said, as workers began to climb down to escape the fire.

"One guy in red was trying to climb down and then he just fell. It was horrible," Louise Olson, who lives opposite the tower, told the Associated Press news agency.

"It was kind of like 9/11," AP quoted another witness, Steven Wullinger, as saying after seeing the falling man.

The fire has now been brought under control.

Many construction workers in the United Arab Emirates are Asians, mainly from the Indian subcontinent.

But officials have not announced the nationality of the casualties.

Guess where I live

Been here for 5 years. Arranging to leave in the next couple of months. I wish the UAE well, but think it's fallen victim to a severe bout of greed and believing its own hype.... which has been thrust upon it by wiley foreign businessmen, who don't give a toss about the place, except in cash cow terms, I think.

80% of all properties sold were purchased by short term investors. Many properties have changed hands many times before they were even built. The build quality is at best questionable. You won't find many buildings here over 30 years old.

if you want to buy here, come and stay in July and August first. It is forecast to reach 54 degrees this year, and the humidity is debilitating. No one goes to the beach in the summer. Pretty soon the beaches will be gone, part of private developments.

Many houses on the Palm (1st) were designed to have garages. The plans were changed to cram the houses much closer together.... more profit. The gargages went. You may get an electric buggy from a car park to get your Spinneys shopping home. Pay a million quid for that? get a life.

And Gasman.... no tax, eh? 5% municipality tax, foreigners pay more than double the local rate for electricity and water.... my leccy bill is about GBP 2000 a year, because of the aircon. Food is nearly four times the price if you want to eat what you eat in the UK.... Teletubbies Yoghurt, 99p, here, nearly 4 quid. And don't ask about Bacon!!

We thought it was ok when we arrived. It's getting steadily more stressful and unpleasant, and we're off.... bye bye, Dubai

??????

"And don't ask about Bacon!"

You're in a Muslim country - why do you expect to even be able to buy bacon, let alone buy it cheaply!

I'm sure you're right, but if you've been out of the UK for the last 5 years, you're in for one hell of a shock, especially if you have children. For starters, try:
huge increase in taxes (especially stealth taxes)
huge increase in burglaries, muggings, stabbings, shootings
degradation of media and TV offerings - porn, violence, swearing as the norm
decline of health service, risk of MRSA
education run by bureaucrats imposing targets
litter on streets
drug problems

Give me Dubai any day!

Whoooaaa there, fws!! I didn't say the Uk was better. We're not off to the UK, we're leaving Dubai. I'm just passing on a little info for people considering spending GBP 600K on a 4 bedroom villa in the Ranches, or well over a million on the palms.... it isn't as rosy as the marketing men would like people to think. And if you live here, you know exactly what I'm talking about....

Sorry Dubai,

Everything's relative! Hope you're very happy wherever you're moving to. Good luck.

Thanks fws.

it will have its downside too. There doesn't seem to be an ideal place to go anymore!

I'd love to go back to the Uk, but not as it is. We go back every year, and every year we come away more disappointed.

What you say is true. I'd rather start afresh in a country I don't remember as being good.... which the Uk was, a long time ago.

Take care, and good luck to you, too.

dubai not better than the uk? lol it always rains here and the place is gloomy, retarded small towns where chavs dwell.

Dubai,

Are you able to shed any light on the resale market in Dubai of actual properties that have been built and lived in? I'm finding it difficult to find any info on this to see if the market exists. Is seems that everyone is still pushing off plan which in 2007 you wouldn't go near.

Although a muslim country the last time i was there you could actually buy pork and bacon in the supermarkets. Has that changed?

You can buy bacon in Dubai - it is just very expensive. As for it being a Muslim country, so what? We are a christian country but you can buy halal meat here.

Castro

The news we get is generally from connected mates at work and in the pub! There are a lot of Brits in the construction and real estate businesses here.

For something more solid, the papers often publish stories that give insights.... Gulf News, Khaleej Times, 7 days... you'll have to google them.

Or just google dubai property crash / collapse, that will dredge up some interesting pages!

I know a lot of people that have lived here for more than 10 years.... not one of them will sink a penny of their own money into property here. I'd rather listen to them than some EA PR type any day.

Oh, yes you can buy bacon, and alcohol!!

But like Marge says, so what, we bend over backwards in the UK to accommodate people of different faiths and cultures, why shouldn't we expect the same courtesy extended to us? Bottom line is if they didn't, people from Europe wouldn't bother coming here.

i lived in the middle east and i would never put a penny into the property market there.....with all the trouble in the world right now it would only take 1 nutcase to walk into a busy shopping centre, in Dubai, full of westerners, and pull the rip cord and (excuse the pund) bang goes the whole foreign investment in property.....try selling an apartment after that...

I watched that programme Dubai Dreams, and when they asked the head guy if it was true that there had been 'problems', he would not comment......so i suspect that there have been little crazy guys doing naughty things, but the government has been covering it up.....otherwise they will be in the desert with out a camel (middle east version of - up the creek without a paddle)...so to speak.

it still baffles me how anywhere in the middle east could be a holiday destination

thats just my opinion....each to their own i say.

ih

I find this thread very interesting..

so dubai .. were you saying that you would not buy a 600k villa in dubai and that it is all overpriced now?

what is your take on ajman and ras al khaimah?

About bacon.. I mean give the city some time folks.. after all they are muslim.. when expats start moving in.. they will bring the bacon with them and at cheaper prices too..

I have never seen one british person sell halal meat! its the asians who have started up stores and sold them..

besides tesco is getting everywhere .. I am sure they have their eye on dubai!

I was hoping to buy in dubai marina myself... a 3 bed with maids quarters for me and the kids..

p.s. How hot is it in dubai again??

Dubai is about a decade late in coming to the party ..... by the time all the building is finished, we'll be in the middle of a major global downturn ..... and probably a couple more wars !!

Dubai property Has been one of the best investments in 2007. Office and residences in Business Bay and DIFC have gone up 90%!! during the year. My 5 properties in jumeirah lake towers and dubai marina have appreciated between 30%-50%.

There is an active resale market there unlike other emerging places (like bulgaria where i also own).

but most of all the rental returns are the 4th highest in the world - between 10 - 15 percent yield with current prices.
Anyone who has bought 2 years ago is yielding around 25%

Currently there is a great shortage of completed properties. THere were various doom mongers predicting a crash 2 years ago. It hasnt happened - on the contrary prices are rising fast. The dubai authorities are controlling the supply by introducing rules and regulations that are throwing the cowboy developers out of the market.

I think Dubai is the place to invest in 2008 and for the next 3 years at least. Remember the boom in the UK had lasted the better part of 15 years.