Opportunity or Disaster - Dubai Real estate Market

Dear Readers,

Opportunity or disaster? Today it seems quite a challenge to foresee the future of Dubai real estate market. Dubai real estate market is an extraordinary market and you need extraordinary measures and solutions.
I look at the market as a great opportunity market with excellent deals soon to come. People are still holding on to their properties even though you can clearly see that lost of them will not make it for the next payment even with a better payment schedule. (for the first time, i received an email from a brokerage house that wants to sell their license, furniture and all...that is quite alarming). Again a good opportunity for the long term real estate brokers.

What do you think? opportunity or disaster?

good day,
propertyconsultant
dubai property crisis

New Laws in Dubai - RERA

Dear reader,

Laws are created to protect our rights and assets. The dubai real estate market has boomed since 1999 and lots lots lots of people made lots of money. They took the risk at that time while no rules/regulation was in place and guest what...they are happy investors. But boom, the time has come for a correction and everyone is running again our business (they want their money back or this and that about the law about the country etc...). People/real investors should NOT Panic, they know that market correction was coming and they are still out there hunting for good deal and they are making good deals. The losers are the gamblers, the ones that wanted to flip their properties in no time...guess what it did not happen this time because the market is going through a correction like any other business therefore take it easy on yourself and gather the facts, keep your emotions low and take action accordingly. Don't loose faith in yourself...

propertyconsultant
dubai property crisis

Real estate recruitment

Dear Readers!

i am amazed to find out that some real estate companies in Dubai are still recruiting real estate agents. I really wonder why? in time of crisis that everyone talks about in dubai, why would a real estate company in dubai hire more agents? i heard that emaar, damac, tameer, nakheel have fired each about 100 to 200 people.

Do you know why? anyone has heard about real estate companies closing business? is there enough round for real estate business expansion?

Would love to hear from you.

propertyconsultant
dubai property crisis

propertyconsultant

Jumeirah Village South - Watch out

Dear readers,

As promise, here are the things your should be careful about when buying in JVS - jumeirah village south:

- Select a reputable developer with a solid background;
- Make sure the construction is in progess;
- Visit the site even if it means to ask them to take you there;
- Ensure the price per sqft is around 1000 DHS (too low and you may loose);
- Make sure the bulk of the payment is push at delivery;
- Ask if they have delivered projects earlier;

Keep in mind those points when buying in JVS. I still believe it is a great community, don't loose sight.

Talk to you soon...property consutlant

propertyconsultant
dubai property crisis

Great opportunity in Jumeirah Village South!!!!

Dear readers,

Time in the real estate market in dubai are not easy. However, you the real investors out there know very well that it is time of opportunity. Sellers are willing to negotiate seriously...the time of ego is gone. They are badly in need for cash to pay their other commitments. Therefore, if you are a cash buyer or long term investor, i highly recommend Jumeirah Village South (JVS) because it offers many advantages over other areas:

- location is great: circled by 3 major roads - al khail road, barsha road and emirates road. Access to this major district is very easy specially people commuting from jebel ali to dubai or dubai to jebel ali or even abu dhabi.

- dubai metro available at JVS: if you had a closer look at the master plan, you will notice that the metro (purple line) is crossing the center of jumeirah village south or also called jumeirah village circle. So easy access to other area like jumeirah, mall of emirates, dubai international aiport, dubai jebel ali airport, abu dhabi, deira city center etc...

- Price per square foot: it is a bargain...you can get unit, apartment, town house in jumeirah village south below a 1000Dhs per square foot. You know what, even at 1100-1200 Dhs you are still buying at a good price. Hence, do not over look at this great opportunity in a great project.

- Diversity in a real community: Either commercial, residential or stand alone units...jumeirah village south has it all...you can live, work and enjoy your time in the same community. Remember! easy access to whatever you need is key in a growing city like Dubai.

- Proximity to other great projects: Jumeirah Village SOuth is close the very well know porjects: greens, springs, meadows, dubai sport city, IMPZ, jumeirah lake, arabian ranches etc..and just behind al barsha and mall of emirates. Get you car and drive around, you will be surprise.

In my next post i will take about the watch outs in jumeirah village south...you should make sure you pick up the best in there....Be well and enjoy your day!!

propertyconsultant
dubai property crisis

YES it is official, Dubai Property Market in CRISIS!!!!

hello,

YES the Dubai property market is in crisis. I have two reasons to say so:

1 - Banks are not lending any money to real estate company, brokers, agents etc...
2 - Dubai property market is standing still.

There are many factors that you may have read in the papers that indicate the above:
- Land owners have been given a new payment schedule;
- Developers are reviewing their client payment schedule;
- Developer are canceling or holding on new projects;
- Banks are not loaning anyone int he business;
- International investors are holding their investments in the country;

These are only few of the points that i have picked up...many are still hiding. My insights are saying that more issues will show up in the near future. Price will drop even lower!!!!

However, i highly recommend to investors NOT TO PANIC...more about it later.

Be well, property consultant
propertyconsultant
dubai property crisis

Dubai Real estate market is SLOW!!

hello,

No matter what we think or read, the real estate market is very slow, slow, slow...the sales are down almost dead. The phones are not ringing anymore...from more than 100 calls to nothing at all. It is quite alarming for us. At the moment, it is all about selling, selling, selling and nothing more than selling...basically it is a selling market and good news are rare these days...

Let me know what are your thoughts on the matter, i would love to hear from you.

till next time, Be well....the property consultant

propertyconsultant
dubai property crisis

MiNC have run out of Money to Build Prodigy, Jumeirah Village!

Dear all

I have bought a 1 bedroom on Prodigy 1, and have received a letter from MiNC, stating that they have run out of money and banks will not give them finance. As a result, the are demanding more money from buyer otherwise they cannot build this project.

I am not sure if you may or may not be aware. This may only effect Prodigy 1, but may affect all the other buildings. A copy of this letter is below:

Dear ,

Given the current economic climate and the impact on the property sector, including MiNC, I am writing to provide an update on our strategy and plans going forward in relation to the Prodigy 1 building. The purpose of this letter is to highlight the issues we face in completing this building and proposed solutions. We need your assistance in achieving these plans.

As you will be aware, we have been experiencing delays in completing this project. I would like to assure you that the successful completion of this project has been, and remains, our most critical business priority. We are absolutely committed to making sure we deliver on our promise. However, we have faced a number of challenges since the start of the project, and we are being further challenged by the fall-out from the economic crisis in the region. There follows a summary of the challenges and our proposal for overcoming these:

• We launched the Prodigy 1 project in October 2006, following the purchase of land from Nakheel. Having been promised immediate hand-over of the land, Nakheel actually delivered the land for construction in May 2008. Even though the apartments in Prodigy 1 had substantially been sold, the delay in receiving the land from Nakheel had a significant negative impact on the project;

• Construction prices doubled during the time we waited for the land to be handed over, with a significant negative effect on the viability of the project;

• We also witnessed a doubling of construction-related professional fees and a large increase in government-imposed costs during this period;

• The introduction of new regulations by the Government of Dubai, although welcome in concept, made it extremely difficult for us to proceed with the project. This was because our financial model was different to that imposed by the Government of Dubai; whereas we had envisaged funding the construction of Prodigy 1 with cash flow from the overall Prodigy project cash flow (six buildings), this was no longer allowed;

• The arrival of the global financial crisis has had a severe impact on the monies MiNC has available to build Prodigy 1. We are no longer able to subsidise construction of the project; the project needs to be self-funded as originally intended;

• Additionally, the liquidity squeeze in local banks has recently caused two of our local banks to withdraw project finance for Prodigy 1, having originally agreed to provide this funding.

The following is the status of the project as a result of the above:

• The vast majority of apartments in the project have been sold.

• The project is no longer financially viable; costs have increased to the extent that MiNC would make a significant and material loss if it were to build this project. MiNC can no longer afford to subsidise this loss;

• Construction had commenced on the project; however, progress has been halted, as the contractor has not been paid due to the withdrawal of project funding by the bank. The project has a severe cash flow shortage.

In short the project has stalled and we do not see it progressing any further in the current economic climate unless we are able to inject cash in to this project as a matter of urgency. We are determined to see this project through to the finish despite these uncontrollable events.

Our proposal

In order to ensure that we are able to construct the Prodigy 1 building and deliver your unit to you, we need you to pay an additional AED 326,000 for your apartment. Given current trading conditions, we believe that this is the only viable option available. We will need all of this additional payment up-front in order to continue with construction. The other installments will remain as per the original schedule.

Your new price would be AED 696,000. This equates to AED 1,000 per square foot.

In exchange for this, we will be able to instruct our contractors to re-commence construction of this building immediately. Clearly this will be dependent on all buyers accepting this offer, otherwise your money will not be utilised.

We recognise that our valued customers will not be pleased with an increase in the cost of the unit. We hope that some of your displeasure will be mitigated by the fact that the ultimate price you will have paid for your unit will ultimately be significantly below market value at time of completion.

We estimate that your revised cost will be at least 25% below market value. We also believe that rental yields will remain firm at 8-10% of current values and much higher than this on purchase price.

Should you agree to our proposal, we will of course increase our rental guarantee to 8% of your increased purchase price.

Summary

I would like to assure you that we have seriously considered every option to arrive at the proposal presented above, and that we sincerely regret the changes to our original agreement.

The current economic climate and the impact on the property sector are certainly ‘unique’ and thus require ‘unique’ thinking, analysis and action. The proposal outlined above is something that MiNC would never consider under normal circumstances. Events outside of our control have forced us to make difficult decisions such as these. In light of the current market dynamics in Dubai, we believe that this is a positive step in achieving a successful completion of this project. We hope that you feel the same way, remaining enthusiastic and positive in achieving this goal with us.

We sincerely apologise for the inconvenience this communication and subsequent actions required of you have caused.

To reiterate my sentiments above, I and everyone at MiNC is absolutely committed to building Prodigy 1 so that we can deliver your unit no later than June 2010. We believe that our proposed course of action will ensure we meet this target. Failing this, we fear that the project will be suspended, possibly permanently.

A sales representative from our office will be contacting you imminently to discuss this further and address any concerns you may have. In the meantime, if you have any questions in regard to the above, please do not hesitate to contact:

Sales Customer Service

Mr. Ali Mirzaei | Tel: +971 50 501 7802 Ms. Pooja Lal | Tel: +971 50 658 7667

If you agree to the proposal outlined above, could you please signify your acceptance by signing and dating the Appendix attached, returning it to this office by fax or scanned copy via email at your earliest possible convenience. I look forward to providing you more updates following the positive outcome of this proposal.

Yours sincerely,

Haroon Mahmood

Chief Executive Officer, Dubai