In September 2008 the first Dubai off-plan property boom came to a sudden stop with the arrival of the global financial crisis.
This proved a double whammy for the local economy that was rescued by a $20 billion emergency package from Abu Dhabi later the following year.
This year a similar, though much smaller and shorter, second boom in off-plan property sales also ended, albeit with a big correction and not a sudden stop.
So, does that leave Dubai residential property about to experience a similar crash in values to that of 2008 when home prices dropped by around 60 per cent? I don’t think so.
What really makes the Dubai real estate market so different now from 2008 is that house prices have actually already been falling for three, almost four years.
In 2008 both the cardiac arrest in the off-plan market, and plummeting prices, struck at the same time. It really has been different this time around, and that makes the recovery prospects very different too.
But don’t let the rash of recent property project launches fool you. The recent downturn in off-plan sales is a matter of public record.
Dubai real estate witnessed a 46 per cent crash in off-plan sales by value in the first quarter, and a 24 per cent decline in previously owned resales, according to data from consultant Reidin-GCP.
The Dubai Land Department also reported a 25 per cent fall in the value of all real estate transactions in the first quarter by comparison to the data that it published a year ago for the same period.
On the other hand, actual Dubai house prices have been quietly slipping in value since at least the summer of 2014. You can pin that on a doubling of sales transaction fees the previous November and a tightening of mortgage lending at the same time, plus the impact of an oil price slump on business in Dubai.
Take a Jumeriah Park three-bed Legacy Large villa. Its value peaked around Dh5.5 million in early 2014 and today would be lucky to fetch Dh4m. That’s quite a fall in value.
However, for anybody who is a student of real estate valuation cycles this is also quite a typical down cycle for any major residential market.
After three to four years you would expect to see prices bottom out, awaiting a catalyst - often a fall in interest rates - to start the recovery in valuations to at least previous peaks. Maybe prices are now on the floor.
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Read more from Peter Cooper:
How to bulletproof your portfolio against the new bear market
Using the catch-up theory for investment in global property
How to maximise your gains in a gold rally
Beware of the great cryptocurrency con
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On my last visit to the Dubai Opera, I happened to be seated near my most recent estate agent. I asked him how business was and he replied ‘what business.’ In fact, he had given up trying to sell homes and started a mobile restaurant business.
He added that the boom in off-plan sales last year crowded out sales in the second hand market and put further pressure on prices before itself blowing up as a mini-bubble.
That said it does not seem to have put developers off making launches, and some pretty ambitious ones at that, clearly designed to catch the attention of the diminishing number of buyers.
Majid Al Futtaim’s belated entry into the market early this month, Tilal Al Ghaf, a 6,500 villa project including a swimmable lake with 400-metre beachfront for residents caught my eye. Shades of the 2008 boom indeed. I recall the Cityscape property show of that year with revolving skyscrapers, a kilometre-high skyscraper, ski dome and a dinosaur park.
None of these projects ever got built, although some of the dinosaurs later became part of an indoor theme park. True, most of the more down-to-earth developments did eventually break ground.
In the case of Jumeirah Park, for example, the last to buy did get their villas but seven years late. Will those putting down deposits now for off-plan projects also have a long wait?
I doubt it. The system is better organised these days with developers paying funds into escrow accounts and paid in stages according to the progress of construction.
So where does this leave would-be Dubai homeowners?
If you have the cash, there has actually never been a better time to buy an existing property. Prices show signs of bottoming out after a classic down cycle, and there is plenty of choice.
Even for off-plan you will be able to strike a very good deal, just be wary about possible late delivery, the balance sheet of your developer, your own financial position and the service fees that might be necessary to pay for any over-the-top facilities.
Apart from the real estate cycle I would also pay attention to the business outlook for a major regional hub city like Dubai.
What’s happening in Saudi Arabia increasingly looks like a break with the past analogous to China in the early 1990s, and that hugely benefitted both Hong Kong and Singapore house prices. Perhaps Saudi Arabia’s reforms will have the same effect on Dubai and Abu Dhabi.
Then consider oil prices. It was also the 2014 crash in oil prices that ended the UAE’s post-financial crash recovery in property prices.
With Brent Crude now up from around $30 to the mid-$70s, is the impact on regional business so hard to predict?
Will house prices not follow upwards as businesses employ more people and they need housing? Will the existing over-supply not be quickly taken up - as it was in 2010 to 2011 - causing prices of the remaining housing stock to increase?
Of course this may not happen for another six months. A summer clear out will come first.
Then again UAE governments have been investing strongly despite lower oil prices so that the infrastructure and housing is ready to exploit this upturn and to stage the Expo 2020 that will bring record numbers of visitors to this country.
No, 2018 is not another 2008 for local real estate. If you can, this is the time to buy, not sell.
Peter Cooper has been writing about finance in the Gulf for more than 20 years
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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MOST%20POLLUTED%20COUNTRIES%20IN%20THE%20WORLD
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Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
Look north
BBC business reporters, like a new raft of government officials, are being removed from the national and international hub of London and surely the quality of their work must suffer.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
RESULTS
6.30pm: Emirates Holidays Maiden (TB) Dh 82,500 (Dirt) 1,900m
Winner: Lady Snazz, Richard Mullen (jockey), Satish Seemar (trainer).
7.05pm: Arabian Adventures Maiden (TB) Dh 82,500 (D) 1,200m
Winner: Zhou Storm, Connor Beasley, Ali Rashid Al Raihe.
7.40pm: Emirates Skywards Handicap (TB) Dh 82,500 (D) 1,200m
Winner: Rich And Famous, Royston Ffrench, Salem bin Ghadayer.
8.15pm: Emirates Airline Conditions (TB) Dh 120,000 (D) 1,400m
Winner: Rio Angie, Sam Hitchcock, Doug Watson.
8.50pm: Emirates Sky Cargo (TB) Dh 92,500 (D) 1,400m
Winner: Kinver Edge, Richard Mullen, Satish Seemar.
9.15pm: Emirates.com (TB) Dh 95,000 (D) 2,000m
Winner: Firnas, Xavier Ziani, Salem bin Ghadayer.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
COMPANY%20PROFILE
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Company%20Profile
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Avatar%20(2009)
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EJames%20Cameron%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ESam%20Worthington%2C%20Zoe%20Saldana%2C%20Sigourney%20Weaver%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
