When a boom turns to bust, buyers tend to avoid the property market as if it has been universally hit with dry rot. Prices plummet, especially on the secondary market.
This has happened in the West during the financial crisis and filtered through to major economies in Asia such as China and Japan.
Even the market in the UAE has started to soften, with prices in Downtown Burj Dubai falling by an average of 22 per cent in the past few months, according to brokers.
"There is a lot of fear in the market," said Robert McKinnon, an analyst at Al Mal Capital. "A lot of it is probably overblown but it is having a real impact."
Concerns arose at the soaring costs of property in the Emirates after prices jumped by 43 per cent in the first quarter of this year, according to Colliers International. But while there has been a distinct slowdown in the past two months, the UAE should be able to bounce back. The country may be experiencing its first property wobble, with big developers scaling back projects and laying off staff, but analysts still see great opportunities for people who are looking to buy a home to live in.
Better still, they foresee a leaner, more realistic property sector that is tied to the forces of supply and demand.
"Buyers will, for once, be able to find a few bargains around," said John McGaw, the chief executive of the regional office of Killik & Co. "There will be quite a few forced sellers who can't afford their payments. They will just want to get rid of the property, even at a loss."
The case for the security of the medium-term and long-term property market is fairly simple. There is enough oil in the UAE for another century, guaranteeing the Government enough cash to keep the economy ticking over. Property would still be in demand by companies setting up or expanding here and wealthy Middle Eastern buyers who want to spend time in the Emirates. And because supply does not go close to meeting the existing market demand, rental yields will remain high for years and prices will see healthy growth.
The key for buyers is to be aware of the changed market. Speculators - love them or hate them - are gone. This makes off-plan property more risky. Many projects, especially in Dubai, were launched and sold out to speculators in a matter of days. But a group of those buyers - nobody is sure how big - are now having trouble paying their instalments, leading developers to consider cancelling or delaying projects.
"Off-plan is a problem," Mr McGaw said. "You are not quite sure if the building is going to materialise or not."
So a key strategy in buying in this market is assessing how far advanced a development is in construction and whether the developer is likely to cancel or delay the project.
Some developers, such as Aldar Properties in Abu Dhabi, say they have enough financing to cover their current project list. In a research note last week, HSBC called the company "the best shelter for investors" and likely to provide "good appreciation potential". Still, much of its portfolio is still under construction and will not be ready for occupation until next year.
The fact that speculators were gone was a good indicator that the market was getting healthier, said Adel Lootah, the executive director of the Dubai Property Society.
"Whatever buyers we are left with are real buyers," he said. "They know what they are doing. They look at the long term. This is very good."
Mr Lootah said the market "is in good condition, but for a different set of people".
"Now is the time for the people who were the bystanders when everyone else was buying. They were waiting for the right opportunity."
The problem, even for these buyers, is raising finance. Banks are now lending on much tighter terms - as low as 50 and 60 per cent of purchase price in some cases - which means buyers need a lot more of their own money to get into the market. Lloyds TSB has stopped lending altogether for UAE apartment purchases. "This is the biggest problem right now for everyone," said Chris Dommett, the chief executive of the mortgage advisory service John Charcol in Dubai. "You need to have a lot of money and some courage to buy right now."
Emaar Properties is endeavouring to make life easier for "stronger" buyers - people with good credit records and an interest in the long term. Last week the firm announced two new payment plans. Under "plan to own", buyers can put down 5 per cent, delay their 25 per cent downpayment for five years and get the rest of the money from a lender. Under the "rent to own" scheme, a buyer can contribute the first year of rent toward purchase of the apartment if they decide within 10 months to buy.
Iseeb Rehman, the managing director of Sherwoods Independent Property Consultants, said the move was smart because "the market has changed".
"They made it clear they are committed to help the end-users," he said. "It can hopefully get sales going again."
Of course, the property adages still apply. Location is still a key factor in picking a place to live or invest. If you buy an apartment on Reem Island or Palm Jebel Ali, you are not likely to see your home for at least a year and, even then, much of the islands will still be a construction site. This could hit your quality of living or your rental income, especially if transport is difficult.
And quality has become the golden word again, said Andrew Greaves, a partner at Trowers & Hamlins.
"Quality to some extent has suffered in the region because of a drive to rationalise speed and quality of delivery," he said. "If one market is better positioned to ride out the credit crunch it's the Middle East. Yes, we're in a period where we have to be very cautious, but there are certainly opportunities for expansion in the region."
@Email:bhope@thenational.ae
* additional reporting by Angela Giuffrida
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
SRI LANKS ODI SQUAD
Perera (capt), Mendis, Gunathilaka, de Silva, Nissanka, Shanaka, Bandara, Hasaranga, Udana, Dananjaya, Dickwella, Chameera, Mendis, Fernando, Sandakan, Karunaratne, Fernando, Fernando.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20synchronous%20electric%20motors%20%20%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E646hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E830Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ETwo-speed%20auto%20(rear%20axle)%3B%20single-speed%20auto%20(front)%20%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh552%2C311%3B%20Dh660%2C408%20(as%20tested)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
The specs: 2019 Audi A8
Price From Dh390,000
Engine 3.0L V6 turbo
Gearbox Eight-speed automatic
Power 345hp @ 5,000rpm
Torque 500Nm @ 1,370rpm
Fuel economy, combined 7.5L / 100km
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
COMPANY%20PROFILE
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Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
SRI LANKA SQUAD
Upul Tharanga (captain), Dinesh Chandimal, Niroshan Dickwella
Lahiru Thirimanne, Kusal Mendis, Milinda Siriwardana
Chamara Kapugedara, Thisara Perera, Seekuge Prasanna
Nuwan Pradeep, Suranga Lakmal, Dushmantha Chameera
Vishwa Fernando, Akila Dananjaya, Jeffrey Vandersay
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait this month is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
UAE’s fixtures: Fri Apr 20, UAE v Qatar; Sat Apr 21, UAE v Saudi Arabia; Mon Apr 23, UAE v Bahrain; Tue Apr 24, UAE v Maldives; Thu Apr 26, UAE v Kuwait
World T20 2020 Qualifying process:
- Sixteen teams will play at the World T20 in two years’ time.
- Australia have already qualified as hosts
- Nine places are available to the top nine ranked sides in the ICC’s T20i standings, not including Australia, on Dec 31, 2018.
- The final six teams will be decided by a 14-team World T20 Qualifier.
World T20 standings: 1 Pakistan; 2 Australia; 3 India; 4 New Zealand; 5 England; 6 South Africa; 7 West Indies; 8 Sri Lanka; 9 Afghanistan; 10 Bangladesh; 11 Scotland; 12 Zimbabwe; 13 UAE; 14 Netherlands; 15 Hong Kong; 16 Papua New Guinea; 17 Oman; 18 Ireland
Summer special
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Company%20Profile
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