Singing Pig

Is Dubai still worth investing in. Going by the number of properties being built has the demand kept up. Who are the people flooding into Dubai who will want to rent these properties.

Does rentals cover mortgage and is there any residual cashflow. Is the demand year round. Is it a good Buy to Sell market or do people generally do BTL.

I used to live in Dubai a while ago when it was not possible to buy in Dubai for non residents. But nowaday the price seems to be so high that it may not appreciate 20-30% that we were hearing about

Any advice??

 

Sunil Prabhu

Hi Sunil, 

If you are looking for a finished property (ready-to-move-in) you should speak to DMC Properties Online. They specialize in the UAE market and know everything that goes on. Plus the service is great. I bought a number of properties from them, simply by stating my budget and a region of preference. They organized all of the viewing within a few days. Really cool company, I can certainly recommend it to anyone who wants to buy a flat/house in UAE. http://www.dmcpropertiesonline.com

Ehhmm nice try at a plug but unfortunately your company is not cool, the website does not even work and you are not RERA approved.

Remember guys, make sure that you only use real estate agents and developers approved by RERA when purchasing property in Dubai.

 

If you have investment questions about Dubai, it is best to ask here,

http://www.skyscrapercity.com/showthread.php?t=490764&page=267

 

A reminder to everyone.

Do not invest in any property by DAMAC.

http://www.skyscrapercity.com/showthread.php?p=19084609#post19084609

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Palm Springs investors face millions in losses

Devastated investors in Damac Properties' axed development on the Palm Jebel Ali are facing millions of dirhams in losses, one of the project's investors has told ArabianBusiness.com.

The Dubai-based developer recently cancelled the much-delayed Palm Springs project five years after launch, citing "redevelopment of the plots".

Damac has offered investors compensation of 6% annual interest on the original purchase price, or the option of transferring their investment to another project with a 15% discountMany buyers have snapped up Palm Springs units on the secondary market, meaning off an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.

Prior to the cancellation of the project, Palm Springs units were estimated to be worth more than double the original purchase price, according to investors.

Investors are now threatening to take Damac to court if it does not reverse its decision and continue with construction.

Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to reverse its decision or face legal action.

London-based investor Karl Brown told ArabianBusiness.com members of the group were facing average losses on their investment ranging between 300,000-600,000 dirhams ($81,000-$163,000), depending on when they purchased their unit.

Brown said he bought his Palm Springs apartment on resale in March 2006 for 1.5 million dirhams and believes the property is now valued at more than 2.2 million dirhams.

However, he will only receive the original purchase price, estimated at about 1.1 million dirhams, plus 6% interest for each of the five years since the project's launch.

Brown said Damac had told him it was not the developer's contractual obligation to refund money that was paid on resales.

Brown said UK investors' losses were compounded by the rising value of the British pound against the dirham.

Many investors purchased their units when the exchange rate was 6.4 dirhams to the pound, while the exchange rate is now around 7.3 dirhams to the pound, he said.

Brown said the group, the Palm Spring Investors Group, was appealing to Dubai's Real Estate Regulatory Authority (Rera) and Nakheel, master developer of the Palm Jebel Ali, for assistance with the dispute.

Damac was not immediately available for comment, but in a statement issued earlier the developer said it understood the situation was serious and unfortunate, but that it was "completely outside Damac Properties control".

“Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and as a result, the Palm Springs project has been cancelled, Niall McLoughlin, senior vice president of corporate communications at Damac Holding, said in the statement.

“Damac is committed to its customers and in view of this cancellation, Damac Properties will provide customers an opportunity to release the investment made at Palm Springs and transfer the monies to any other project in the Damac Properties portfolio at a discounted price 15% below current market."

The 25-storey Palm Springs project had originally been planned for completion by late 2007, and buyers were already angry over repeated delays, contractual issues and complaints of poor customer service by Damac.

Damac threatened with lawsuit after project axed
Investors unhappy with compensation after developer cancels Palm Jebel Ali project.

Reason for axing Palm Springs questioned
by Amy Glass and Dylan Bowman on Tuesday, 01 April 2008
PROJECT SAGA: Nakheel has questioned Damac's reason for cancelling its Palm Springs project.The master developer of the Palm Jebel Ali has raised questions over Damac Properties' explanation for axing its Palm Springs project on the manmade island.

Dubai-based Damac cancelled the much-delayed project late last month due to "redevelopment of the plots", stating that the development "cannot be situated on the re-allocated plot".

Nakheel, which is building three palm-shaped islands off Dubai's coast, said on Tuesday it had informed investors of changes to the Palm Jebel Ali masterplan over 10 months ago.

Nakheel also said it had "positive" correspondence with Damac as recently as February, in which the developer gave no indication that it would not be going ahead with the project.

“We are very surprised by the statements made by Damac suggesting that the reasons for the recent cancellation of its Palm Springs project are due to revisions in The Palm Jebel Ali masterplan...," Marwan Al Qamzi, Nakheel managing director of the Palm Jebel Ali, said in a statement.

“Our last interaction with Damac took place in February of this year and was one of positive engagement, which left us with the firm view that Damac was proceeding with the project..."

Al Qamzi said the reason for the scrapping the 25-storey beachfront development had to be related to something other than the re-allocation of the plots.

“From Nakheel’s perspective, Damac’s cancellation of the Palm Springs project must be linked to other development issues specifically related to the project,” Al Qamzi said.

Damac was not immediately available for comment when contacted by ArabianBusiness.com.

Nakheel's remarks will only further infuriate angry investors, who are facing millions of dirhams in losses, one buyer has told ArabianBusiness.com.

Many investors have rejected the compensation being offered by Damac, and are threatening to take the developer to court if it does not reverse its decision and continue with construction.

Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to change its mind or face legal action.

Damac has offered to refund the amount of money investors have put down on their property so far, plus 6% annual interest calculated from the date of each instalment payment, or the option of transferring their investment to another project with a 15% discount.

Many buyers have snapped up Palm Springs units on the secondary market, meaning from an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.

As Palm Spring has yet to be built buyers will not have paid the full original purchase price, but would have made downpayments as agreed milestones were reached.

Secondary market buyers would have paid the seller the premium as well as however much of the original purchase price the seller had paid to Damac.

Damac said it was not the developer's contractual obligation to refund money that was paid on resales, according to an investor.



The saga seems to have reduced confidence in the Dubai property market, according to the latest ArabianBusiness.com spot poll.

Two-thirds of respondents said news of the cancellation had made them think twice about buying property off-plan, stating that it had made them "very cautious about the Dubai property market".

Dubai has a massive secondary market for off-plan real estate, with units passing through numerous hands before a development is finally built as investors capitalise on soaring prices in the sector to make quick profits without putting up huge amounts of capital.

Investors should consider themselves extremely lucky if they get their original investment plus interest returned to them.

 The developer has no obligations to provide profits to speculators, and the delveloper never got any of that specultation money in the first place. You can't expect him to refund money that was never given to him.

He never made any promises to those who purchased on the secondary market, and he has no obligation to them.

Those apartments are NOT wortth twice the original price. Those apartments are worth NOTHING!!!!. There is nothing there but empty air. There are no apartments. No apartment, no value.

Speculators are speculating and speculating is gambling. When you gamble, sometimes you lose.

If you consider how many developers simply walk away, it appears to me that the developer in this case is being very ethical.

In fact, the original investors who sold on the secondary market had better be getting nervous. They sold something that they could not guarantee would ever exist, so you folks who have re-sold had better be looking very closely at what your contract with your buyer says. Unless your documents were drawn up by a very good lawyer, you might have guaranteed the delivery of an apartment in exchange for their money.