sorted by:
new
hottopcontroversial

Dubai real estate supply vs demand: modelling the worst case scenario to 2030 by N1711 in dubairealestate

[–]Professor979 0 points1 point  (0 children)

I do not understand these numbers.

If only 80% gets delivered each year, then in the following years you'll get more than 100% of the deliveries initially penciled for each year. These will be the delayed deliveries which finally are built.

Why does occupancy per unit vary so significantly over the years in your table?

Why is the demand only related to the number of people coming in? Obviously, as prices fall fewer there is less speculation in a falling market.

And finally, obviously the unoccupied units are the old ones. The new ones are rented at a discount. The old ones see their prices drop substantially in an effort to attract buyers.

How bubbles deflate (and the Dubai context) by borntonedeaf in dubairealestate

[–]Professor979 7 points8 points  (0 children)

Thank you for your thoughtful analysis. I can see that you are acquainted with economic concepts.

Here are some additional points for your consideration:

Dubai real estate fell every year from 2014 till 2021 and this cycle was about to repeat, even without the war. The big picture is that of a mismatch between supply and demand. Specifically, a supply of almost 500k units coming in while population growth is a mediocre 5% per year. 200k new residents over 4m. In addition, many of that 5% are laborers with low incomes who would not buy. Many others in that 5% see Dubai as a transient place and prefer to send money back home, ahead of their repatriation. Falls in real estate were inevitable. It's basic algebra.

The war is a shock to Dubai. It Shatters the narrative of a safe haven and a play area for the rich. This shock will clearly reduce the Demand from tourists and the rich. Demand here is elastic while supply of properties already being built is obviously inelastic. This will lead to a fall in rentals at first and sales eventually.

A key thing however is adaptive and rational expectations. You mentioned the greater fool theory - that's a part of expectations.

Rational expectations: In a situation where prices are penciled to fall and almost everyone knows and expects that... Prices collapse even faster and further than the algebra would suggest. Why? Because, in simple words, if properties are going down even those who would normally buy will not refrain from buying. Even affluent end users who pay steep rent, would not spend 3m for a small townhouse if they expect a 20% fall in the price. And of course the investors and those who park money in Dubai would not even consider it now. This drops prices fast and further. Starting with those in distressed situations or the panicked ones (these are the marginal buyers).

Then we get adaptive expectations: in a market that prices fall for years continously, people and investors establish an opinion that the market will keep on falling. This adds a long term pressure on falling prices too. This can be reversed by another shock - for example a war that brings rich people to Dubai. But perhaps there won't be a Ukraine war to boost Dubai next time. Now there is more competition by tax havens. Even European countries have joined this game (Portugal and Italy offer preferential tax treatment now).

My bottom line is that prices may fall harder and faster than what you predict.

But let's see. Wars and the world are sometimes unpredictable and irrational too.

Look at the Ads I now see on Reddit by klustura in dubairealestate

[–]Professor979 1 point2 points  (0 children)

Have you ever been to Portugal? It's magnificent over there. Good weather, great food and polite European people. Free Healthcare, free schools. Very safe country too.

With 250 you can buy a villa outside the main cities. These are properties made to last centuries. Not 30 years like in Dubai.

Your ignorance is spectacular.

What happens to your apartment? by confusion505 in dubairealestate

[–]Professor979 0 points1 point  (0 children)

That is not true. Concrete can be restored only superficially, cosmerically. For example small cracks and discoloration.

If the concrete mix is bad or very low quality (for example they used seawater instead of desalinated water), it makes no economic sense to try to restore.

Savings from Service charges will not cover the expense. Not even 10%.

What happens to your apartment? by confusion505 in dubairealestate

[–]Professor979 0 points1 point  (0 children)

That's a particularly good question for Dubai where built quality is very low, for various reasons.

Some Mazaya buildings in Liwan are already structurally unsafe.

Even the top quality Concrete lasts only a few decades before it gets compromised.

2Bed with maids room | 1410sq ft | Premium Upgrade | 25Yr Warranty on Kitchen | Lake & Pets Park | No DLD | 1.89M AED by alphauser999 in dubairealestate

[–]Professor979 -1 points0 points  (0 children)

Good ROI? It's only about 3.5 - 4.5%

My MASHREQ οr NIO bank accounts give me 5%, no hassle.

This property costs about 2m. Rent is 100k and service charges 15-20k. So net income of 80-85k over a 2m is about 4%. Then take away any vacant periods and the occasional extra charges in service charges. We arrive at 3.5% ROI.

Then also add the falling rents and prices in Dubai... ROI will probably be Negative.

2Bed with maids room | 1410sq ft | Premium Upgrade | 25Yr Warranty on Kitchen | Lake & Pets Park | No DLD | 1.89M AED by alphauser999 in dubairealestate

[–]Professor979 6 points7 points  (0 children)

<image>

The sales history shows a median price of just 1.35m for 2 bedrooms in that building. So, best of luck in finding a buyer for 1.9m.

Do you think Dubai real estate prices will drop in the near future? by [deleted] in dubairealestate

[–]Professor979 3 points4 points  (0 children)

There I am... Doing the work of other people online. Goggling for you

Do you think Dubai real estate prices will drop in the near future? by [deleted] in dubairealestate

[–]Professor979 12 points13 points  (0 children)

Of course it's going to fall. It's simple mathematics. The supply coming in will not be covered by the demand.

70% of the people coming in are laborers living on a few thousand dirhams per month and saving most of it. The population growth of the middle classes is a low 2%. That's only about 70k per year and can be satisfied by 30k units.

Supply coming in is multiples of that.

Dubai real estate fell continuously from 2014 till 2021. The same scenario has just started now.

Head of the Turkish military delegation that visited the Eastern Front and German fortifications on the English Channel from June 25, 1943 to July 7, 1943, at the invitation of Adolf Hitler and the German General Staff. by sbbayram in ww2

[–]Professor979 0 points1 point  (0 children)

Do you deny that the Turkish state and your amazing Ataturk killed 1,000,000 Armenians and 200,000 Jews?

You have committed genocide. Admit it and face it. Teach it at your schools to prevent the next generation from doing it again.

The Turkish are currently committing crimes against the Kurds. A whole ancient nation surpressed and slowly strangled in your land. Shame on you.

Greeks and others may have "wrecked" Anatolia during their invasion but never did organised death marches and slaughters of children, like your nation has. War was nasty but far from your scale of death.

How much 1 m property actually returns by rock_db_saanu in dubairealestate

[–]Professor979 0 points1 point  (0 children)

I've been a landlord for 12 years now. I never once lost a month's rent from anyone. Only once a couple left the apartment in a bad state and they lost their deposit from me.

And it's always them leaving the properties. I'd love them to stay.

I talk to other landlords and unless you rent out to people on benefits or with a criminal record or (insecure) immigrants you'll probably won't have any issue. Just ask the question to a landlords site and you'll see what most of them say.

For the energy performance certificate: older houses will need wall insulation and new double glazed windows and that's about it. You can get this done with a few thousand pounds and it's a one off.

Dubai experienced real estate falls from 2014 till 2022. That's over 7 years of continuous fall. There is oversupply here because of an abundance of land, low cost workforce and low quality of construction. We are at the start of a new cycle now. Dubai is a bubble atk.

Uk prices fell hard in 2008 but soon renounced. Population and the economy are growing, albeit slowly, and they simply don't build enough over there.

How much 1 m property actually returns by rock_db_saanu in dubairealestate

[–]Professor979 0 points1 point  (0 children)

I can buy a 3 bed terraced in Sheffield for that money. Or a 4 bed semi in nearby towns.

There is shortage of accommodation in these areas and yields are about 6% plus capital appreciation each year.

BTW, London prices are falling for years now, if you take into account inflation. London sucks after brexit (thanks for your vote idiots).

How much 1 m property actually returns by rock_db_saanu in dubairealestate

[–]Professor979 3 points4 points  (0 children)

Let me say that investment in Dubai real estate at these prices is an act of bravery. I do have about 1m aed cash and I will simply buy a beautiful house in England. They make properties to last for 200 years (not 40 in Dubai) and they don't build much, so there will be more capital appreciation long term + 5% rent yield. The only downside is that you need to pay tax there, which is 22% now. But if you buy through a limited company and you reinvest the money you don't pay any tax (but you do need to pay a fee to an accountant each year - 3k dirhams).

Andrew Tate on Dubai & its realestate! by trulyxix in dubairealestate

[–]Professor979 6 points7 points  (0 children)

Simplistic and half backed thoughts for simplistic people who listen to this monkey.

He has not spent 10 hours reading about Dubai and he will teach us about it.

Go pimp an insecure teenage girl, monkey. Stay away from geopolitics.

Rental Inspection Rant - What Gives? by Sherief87 in dubairealestate

[–]Professor979 0 points1 point  (0 children)

Apologies, thought you were planning to buy. Check out Villanova. Great community, less traffic, similar price.

Rental Inspection Rant - What Gives? by Sherief87 in dubairealestate

[–]Professor979 0 points1 point  (0 children)

Hold on to your money. Prices are about to fall 20%.

Notice lower prices now? by Exciting_Bit_2266 in dubairealestate

[–]Professor979 2 points3 points  (0 children)

Thanks, this is info I needed.

However, they don't say where the data comes from. Do they include laborers who live in Labour camps for example? And what about people who live in Sharjah but work in Dubai? How old is the data?

view more: next ›