The Dubai property market is a sector for removing fools from their money. Poorly built, hopelessly maintained property and a brutal climate will obviously attract the regional investor with little knowledge and low expectation when one’s homeland is unstable.

But for the Western ex pat looking for a sign of recovery, these snippets of positive news from local cheerleaders should be disregarded. This property market could be facing 2 decades of stagflation similar to Japan where they are still 80% off their 1990 peak.

Ed Note: Why then are villa prices up 20% in a few months? Demand is ahead of supply.

This deja vu article reminds me of the madness we had earlier when agencies and anecdotal comments always said the same thing: prices are going up. Any increase has to be asked off what base? If it has been so low for so long, then even a 20% increase, and only in selected areas, means it is still so way off anything that can be considered reasonable. As you correctly state, most of this is anecdotal anyway until official figures roll in.

Why would any sensible Westerner want to invest and live in Dubai?
What has Dubai actually got to offer?
It doesn’t have Oil, it is merely has a shipping port. It will never become a Financial Centre of the world. It is just a hot sandy place in the Middle east with poor infrastructure and the Middle East appears to becoming very volatile and the more radical stance of the Muslims will not help matters.

Ed Note: highly paid tax-free jobs! It has excellent infrastructure (airline, airport, ports, road, metro, office and apartment towers, shopping mall, ski slope, etc.). It does still have some oil and is the regional financial centre now that Bahrain is in trouble.

Complete & utter nonsense! 20% up….what a joke. The local cheerleaders, meddlers & dreamers might as well go home….the property market is doing a fine job of collapsing on it’s own.

Ed Note: You have to live here to see this. We only report what we can see. It is not a general market recovery, although it has definitely stabilized – but the villa prices are up and the demand is strong in certain areas.

It’s obviously not a market that suits everyone (where is?), but clearly people are still making money in Dubai & that includes the property sector too. Many people including westerners enjoy their life here & experience more success than they did in their home country. The national misery index figures aren’t making for good reading in the west that’s for sure!
I’ve stated on this website before that shrewd investors have been profiting here over the past few years since the 2008 crash began. This doesn’t mean it’s a place for everyone though & that’s consistent throughout the cities of the world.
As a side note to Paul King, it appears that you have a personal problem with Dubai as your comments on this website are always negative about the city & its property sector in particular. I’m still waiting to see a comment from you providing your opinion on a ’safe’ country/city’s property market. Not that you’re obliged too, but it’s always nice to hear an alternative view when you criticize one place so frequently. Any thoughts?

A$..good stuff all around – our editor taking a ribbing from readers & manfully smiling with his serves in return..still the best mix online in finance – very civil, even restrained dialogue..@ the end of the day, world banking is filthy, government is shock value corrupt & investment is buyer beware..when the going gets rocky, our editor can always duck behind precious metal

Paul, I have no problem with Dubai. I live here…the weather is good for 8 months of the year, the golf courses are above average and it still provides the lower middle class with an outstanding quality of life. I just don’t like Dubai property… It’s rubbish! Poorly constructed with clueless maintenance and a brutal climate for the “life expectancy”. The “safe” market to invest in property is the UK. For sure values will take a hit over the next 3-5 years but long term it’s a fantastic market to be involved in. I’ve advised many ex-pats on investing back home rather than the circus that is Dubai property. The editor is very biased towards the Middle East for obvious reasons…he doesn’t actually provide much evidence that he understands what is going on. That is, about the de-leveraging, about the threat of too much debt and everything else that has happened over the last 3 years. Dubai’s villa market is totally reliant on cash buyers relocating from the region’s problem areas…not a reliable plan for me…more wishful thinking. The UK has an ever increasing property shortage due to some of the toughest planning regulations in the world…We have a known population of 60 million (probably more like 70-80 million). I’m from a council estate, east of London and trust me rental income is on the rise due to the barriers of entry to purchase now (20-25% deposit). Warren Buffett once said he likes businesses with a moat around them (high cost of entry to compete). Well the UK has a wonderful moat all the way around it, whereas here… let’s imagine property values did start to rise significantly, them old concrete lorries would fill the roads again so fast, you would be lucky to get out the way!

Ed Note: You’re plain wrong. UK property is massively overvalued. It’s the classic all-the-eggs-in-one-basket investment and incredibly over-leveraged. Dubai has very little mortgage debt and its property is undervalued against the high, tax-free incomes of residents. As for the quality issues: UK property is generally old and lacking in space, let alone modern amenities; in Dubai you get new property with room to breathe and modern equipment – and things can always be put right a modest cost if you find fault with them.

@Paul King, so your personal opinion that Dubai property is “rubbish” is purely subjective. Fair enough, that is your opinion. However, this doesn’t mean that because you believe Dubai property is of a poorer quality than what you expect & therefore not worthy of your investment, that this then applies to everyone who considers investing here. Many people would see Dubai property as a significant improvement on their current homes, including some UK expats, so it depends on who is making the comparison.
The editor’s article highlighted what is happening in the current market and that certain villa communities are seeing a rise in price. I like a difference of opinion & a good debate, but it’s hardly fair to rubbish both him & the article just because you don’t like Dubai property. What he wrote is actually true if you research the market properly (obviously not relying on individual sources from news reports, property agents or even just this website). It doesn’t mean that the market is entering a long-term upward trend, just that certain communities are currently proving to be more in demand than others & hence commanding a higher price than their lows of the past few years.

The UK may well be a ’safer’ option than Dubai from a long-term perspective, but I wouldn’t say that now is a good entry point for the average person.
The UK market is largely measured by what’s happening in London and it could be argued that London’s property market is significantly driven by foreign investors (Arabs, Russian, Chinese, Indian, etc), these are the equivalent of the cash rich investors in Dubai.
Taking the UK property market as a whole, in my opinion it hasn’t actually crashed yet (depending on how a ‘crash’ is defined, 2008 may well be seen as a dip in the future). The UK government intervened by funding banks, reducing stamp duty and cutting interest rates…….the base rate has been at a historical low of 0.5% since March 2009. It can’t stay there forever & when the eventual rise does take place it is highly likely that property values will drop significantly across the UK. The average mortgage is still 4.5 times above the average person’s salary (just below the figure at the height of the boom in 1989!), this is still way too high for the average buyer. The UK’s current policies are aimed at the few, not the masses.
For the record, I’d be reluctant to invest in any real estate market in the current economic environment.

As I pointed out, property values in the UK will take a hit over the next 3-5 years but long term it’s a fantastic place to invest your money. My guess is that the UAE property market still hasn’t fully “bottomed out” and even now could be facing 2 decades of stagflation. Japan is still 80% off it’s 1990 peak even with a high population, low interests rates and high savings amongst it’s citizens.
I’ve said before that no security of property exists here and that the editor jumps on any snippet of positive news to cheerlead the market! Maybe he lived in a small house in a town with no amenities! He’s obviously been seduced by the size of everything here and the shiny “surface” materials used to fool the misguided. There is no good reason to invest in property here over the UK in the long run. It is virtue, not brainpower that pays off.
Ed Note: UK property has been a loser for three years and that continues to be the case as you admit for 3-5 years – please save us from another long term investment!

Apologies for not falling for the editor’s short term noise! The misguided have little interest in long term wealth building. The majority of UAE property will go the way of the dinosaur. Over time, real value is recognized by the marketplace and rewarded accordingly. Jump the fence and leave the dopes behind!

There is no doubt that Dubai offers a comfortable and safe existance within a very volatile part of the world. Hence the increasing attractiveness to many people in the Middle East.

Paul, I agree with a number of the things you mentioned, however while there exists many developments, quite possibly most of the developments are of very shoddy quality and poor construction, there are some developments which have been very well executed in all aspects.

The issue many of us have here in Dubai is that we bought into the “Dubai Dream” and bought over valued properties. Many of us also invested in off plan properties, particularly of note is the “developments” by a “government owned” developer that when the Dubai disco stopped we found out all of a sudden that the “government owned” company was purportedly not government owned despite being owned by the government. The developer then despite holding our deposits decided to put the project “on hold” and wont return monies except put people into garbage they have already built and sold that is 60% higher than the market value.

So we have cash tied in owning tracts of sand and even worse other properties which are upside down loans!

So having done our shirts on property, we need to hang onto any sliver or glimmer of hope in what is unfortunately a hopeless situation.

The “positive” news started in the boom days and unfortunately hasnt stopped as we dont want to know the truth!

Regarding UK realestate, and I am not from the UK, The UK has the population and not much land (unlike Dubai) and hence has shown in most areas, particularly London, a very modest decline, as most people are going no where.

However I dont think you will find much action happening in the UK although I am impressed that the current UK government is doing alot to repair the UK economy.

While Dubai is down 60% and there are no transactions taking place except in one or two areas. The vast majority of the Dubai population has no rights, no chance of permanant residency and no way of obtaining citizenship… so when things get hard most people flee..

Lastly Dubai is one of the few states in the world where holding a government “contract” is propbably the worst “contract” one can hold as the government delays payment if they pay at all!

But it is comfortable, sunny, safe and does offer a decent lifestyle… assuming it doesnt send you bankrupt along with it in the process.