Dubai purchase - beware of what ?

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irish_bob said:
i think the main reason people have gotten burned in dubai in particular is down to the fact that most of the estate agents selling property in dubai were out and out cowboys , you would not expect the average investor to be in the know with regard dubai so most of them rightly or wrongly simply put thier faith in the estate agents
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Before buying anything you should do your own homework. The very least a potential buyer should do is to travel to the location and see it for themselves and get a feel for it. Estate agents have a reputation for being slippery salesmen who will tell you anything you want to hear in order to get you to buy and I have not come accross many people who would trust them.

Many of the "investors" who are now in trouble probably did more research in choosing a new TV than they did in choosing a property because they thought that property was a one way bet.
 
irish_bob said:
i think the main reason people have gotten burned in dubai in particular is down to the fact that most of the estate agents selling property in dubai were out and out cowboys
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I don't necessarily agree with this and with other posts that blame the agencies that were peddling this rubbish. There is a school of thought out there (and on this forum sometimes) that the agencies involved in overseas property were all crooks and conmen (and women).
Nobody seems to attach the same tag to the auctioneers that sold "investment" property in remote parts of Ireland, property that will never give a return and that will never be sold at anything close to its original selling price. Was there somehow a special breed of "cowboys" that set out to fleece innocent Irish buyers as soon as they set foot outside their own safe little country? It's not as simple as that, obviously.
What caught Irish buyers in Dubai and Bulgaria and other dubious spots wasn't the "cowboys"; it was greed. People saw a chance to make a quick buck, to slip one past "johnny foreigner" who didn't realise that property only goes up and up and up, like it was doing in Ireland. Buyers were hearing what they wanted to hear, and they didn't either let common sense or basic research have a hand in their decision-making. It was a case of "grab it quick, before the locals cop on."
I have a property portfolio that stretches across a lot of countries, and while some of it would take a hit now if I were to offload it (which I won't do, because of the market), most of it is performing well and has made me money and continues to do so. I bought some of it myself, by ferreting around in places ahead of the pack and taking my chances, but I also bought some of it through Irish and English agents. I dealt with people I found to be reliable and trustworthy, and I avoided the ones that were clearly talking rubbish. I was able to make the distinction becasue of having done my research on the ground.
So, let's not always blame others for our misfortunes; we need to take a certain amount of responsibility for our own actions.
 
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Lollix, spot on, but not " a certain amount of responsibility" - total responsibility. Trust no-one when it comes to promised rates of return, capital growth etc. Purchasers should do their own research, and based on that make their own considered decisions.
 
Orig Posted by Green Bear on the Pin.

Quote:
Once Booming Dubai Goes Bust
DUBAI, Jan. 2, 2009
http://www.cbsnews.com/video/watch/?id=4696298n
http://www.cbsnews.com/stories/2009/01/ ... 6300.shtml

CBS Evening News: Following Wave Of Speculation, Real Estate Collapses In Middle East's Capital Of The Ultra-Rich

(CBS) Over the years, booming oil prices helped turn Dubai into a land of opportunity and playground for the ultra rich.

But that was then and this is now. And as CBS News correspondent Sheila MacVicar reports, even Dubai is feeling the pinch of the worldwide economic crisis.
The gulf city state's property prices went up as fast and as high as the towering buildings. But reality has suddenly intruded.
One investor said it was as if someone had thrown a switch, as the global credit crunch slammed a city that was, in effect, the world's biggest construction site
It took just 20 years for Dubai to go from a desert outpost with a handful of office towers to a world metropolis, where one fifth of the world's cranes operate, and property became a very hot commodity, with some people playing real estate the way others play poker.
"People were buying and flipping properties on a launch basis," says Manesh Khadri of Century 21 Real Estate. "You launch a property and you flip it within the same day."
Before an apartment was even built you could away with tens, or even hundreds of thousands of dollars.
<snip>
Banks aren't lending. Projects are shelved. And the normally secretive government has had to acknowledge it has one of the highest levels of per-capita debt in the world -- and not enough oil to pay for it.
"The worst is still yet to come in the sense of people losing properties" Khadri says. "That will happen."
Of course, Dubai will come back eventually, many say, perhaps without the speculators and the insane price increases. So while the fizz might be gone, they insist, the water still sparkles.
 
My company are involved in a lot of construction projects in Dubai, both residential and commercial/leisure.

The place has fallen off a cliff recently (since Oct). There is zero work. Every project has been pulled, no funding and little interest from purchasers.
 
Lollix said:
I don't necessarily agree with this and with other posts that blame the agencies that were peddling this rubbish. There is a school of thought out there (and on this forum sometimes) that the agencies involved in overseas property were all crooks and conmen (and women).
Nobody seems to attach the same tag to the auctioneers that sold "investment" property in remote parts of Ireland, property that will never give a return and that will never be sold at anything close to its original selling price. Was there somehow a special breed of "cowboys" that set out to fleece innocent Irish buyers as soon as they set foot outside their own safe little country? It's not as simple as that, obviously.
What caught Irish buyers in Dubai and Bulgaria and other dubious spots wasn't the "cowboys"; it was greed. People saw a chance to make a quick buck, to slip one past "johnny foreigner" who didn't realise that property only goes up and up and up, like it was doing in Ireland. Buyers were hearing what they wanted to hear, and they didn't either let common sense or basic research have a hand in their decision-making. It was a case of "grab it quick, before the locals cop on."
I have a property portfolio that stretches across a lot of countries, and while some of it would take a hit now if I were to offload it (which I won't do, because of the market), most of it is performing well and has made me money and continues to do so. I bought some of it myself, by ferreting around in places ahead of the pack and taking my chances, but I also bought some of it through Irish and English agents. I dealt with people I found to be reliable and trustworthy, and I avoided the ones that were clearly talking rubbish. I was able to make the distinction becasue of having done my research on the ground.
So, let's not always blame others for our misfortunes; we need to take a certain amount of responsibility for our own actions.
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i agree that most investors in dubai and elsewhere had more money than sense but i dont agree with your comparrison with irish auctioneers , not because i think irish auctioners are not as crooked as a rams horn but because while irish property prices are falling through the floor , at least you can be sure of still owning the property in 20 years time should you choose to hold on to it , the same cannot not be said for the likes of dubai where title and proof of ownership is a real red herring and many are baschically at the whim of whatever shiek is in power , from what i can see , their were at least one company who when selling property in dubai , never intended the buyers to be able to resell them
 
Irish_bob, I agree that Dubai was close to the extreme end of the business, but in general I don't think that there is any difference in people's problems that arose from buying overseas and problems that were the result of buying in Ireland. In both cases the problems arose from a lack of due dilligence on tbe part of the buyers.
Agencies in the overseas field ranged from very good through mediocre, inept and downright crooked. Just like at home really when you think of it.
I would draw a comparison between property sold with a guaranteed rental in Bularia and property sold with the same guarantee in Leitrim or Mayo. In both cases, there was no rental market and the buyers were getting their own money back and paying too much for the property in the first place. No difference. There isn't one breed of agent who deals abroad and rips people off, and another breed who operates in Irealnd and who is trustworthy. In both cases, the buyers simply failed to check the offering out properly.
Over the years, I have dealt with agents in ireland who were good, and a few who were not so. I found the same range of ability and honesty in the ranks of the agents working in the overseas market. The good ones were very good, and the bad ones ranged from inept to crooked. I believed none of them until I found out the facts myself, and I wasn't caught out by any of them. I did avoid the stuff in Bulgaria, Cape Verde and Dubai, because it didn't add up for me. When agents told me of guaranteed return I asked them for contracts, and I looked at the activity in the rental sectors in those markets to find out the real position. Not rocket science; it's my money after all and I have only myself to blame if I throw it away.
So let's not blame the agents, if we screwed up, then we screwed up.
 
Lollix said:
Irish_bob, I agree that Dubai was close to the extreme end of the business, but in general I don't think that there is any difference in people's problems that arose from buying overseas and problems that were the result of buying in Ireland. In both cases the problems arose from a lack of due dilligence on tbe part of the buyers.
Agencies in the overseas field ranged from very good through mediocre, inept and downright crooked. Just like at home really when you think of it.
I would draw a comparison between property sold with a guaranteed rental in Bularia and property sold with the same guarantee in Leitrim or Mayo. In both cases, there was no rental market and the buyers were getting their own money back and paying too much for the property in the first place. No difference. There isn't one breed of agent who deals abroad and rips people off, and another breed who operates in Irealnd and who is trustworthy. In both cases, the buyers simply failed to check the offering out properly.
Over the years, I have dealt with agents in ireland who were good, and a few who were not so. I found the same range of ability and honesty in the ranks of the agents working in the overseas market. The good ones were very good, and the bad ones ranged from inept to crooked. I believed none of them until I found out the facts myself, and I wasn't caught out by any of them. I did avoid the stuff in Bulgaria, Cape Verde and Dubai, because it didn't add up for me. When agents told me of guaranteed return I asked them for contracts, and I looked at the activity in the rental sectors in those markets to find out the real position. Not rocket science; it's my money after all and I have only myself to blame if I throw it away.
So let's not blame the agents, if we screwed up, then we screwed up.
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while property in ireland may have been sold under false pretenses as regards guarenteed rental , i dont believe thier have been anything like the number of problems with regard title and proof of ownership compared to dubai
 
Larionovo and Dubai

folks,

Just wondering how many of you out there have invested with Larionovo for their Dubai development in Sports City or elsewhere in Dubai. I am one of their "customers" who is now very worried about the situation and would like to contact other investors to share information and to see what we can do to resolve the situation. Please reply to this post or PM me.
 
There is a good article on Dubai here:

http://www.thenational.ae/article/20090121/BUSINESS/974538207/-1/ART

HSBC report confirms Dubai property decline
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Uta Harnischfeger
  • Last Updated: January 21. 2009 9:12PM UAE / January 21. 2009 5:12PM GMT
Dubai property prices fell 23 per cent last month from their record high in September, a HSBC survey shows, confirming fears that the sector’s difficulties are worse than expected.

The severe credit squeeze has led banks to clamp down on funding and sellers of property have started to offer steep discounts as the global economic and financial crisis deepens. The latest HSBC survey comes as stocks on the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) slid more than 5 per cent yesterday, the seventh consecutive day of losses.
Prices for Dubai villas fell 30 per cent, while the price tags for Dubai apartments were 20 per cent lower than their September peak, the HSBC report said.

It was the first time that a survey measured actual prices at which properties were bought and sold. “Despite signs of stability in advertised prices, discount to agreed prices has deepened since the Sept 2008 peak,” the report said.

Until now, many surveys have been underestimating the true scale of price declines because they looked at advertised prices rather than real transaction prices. Roy Cherry, an analyst at Shuaa Capital, said on Sunday that “we have moved from a strong correction scenario to a crash scenario”. Dubai property prices could fall by as much as 60 per cent in the first half of this year from last year’s peak, he said.
The HSBC report also found “some signs of distressed selling in the fourth quarter of 2008”, and that a small number of units sold at prices “that fell short of estimated construction costs”.

Preliminary January data suggested there may be further price weakness ahead, but the report noted that this was not fully representative of true market forces. The survey described Abu Dhabi’s market as “more stable”. Advertised prices appeared to be tracking transactional prices more closely, it said. The report comes as developers have started to put projects on hold and shed large numbers of staff.
Earlier this month, Colliers International said that residential property prices were 8 per cent lower in the final quarter of last year.

The global financial sentiment has taken another turn for the worse in the face of poor fourth-quarter results and bad financial news, particularly from beleaguered British banks. This has made investors even more pessimistic about the future, leading to further sell-offs in equity markets.
The survey noted that 226 per cent more transactions had been booked in the fourth quarter than in the same period a year earlier. However, analysts said this was due to a change in regulation, as property buyers must now register their purchase with the Central Bank. The measure was part of efforts by authorities to rein in speculative excesses in an overheated property market, which saw speculators flipping off-plan properties.
On the brighter side, property prices last month remained, on average, 19 per cent higher compared with a year earlier, and the number of transactions suggests “that while the market is difficult, volumes and pricing are not as bad as implied by the stock market”, HSBC said in the report.
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