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Local Real Estate Revives as UAE market spirals down,

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   Mohsin
Wednesday, November 12, 2008 06:21 AM 
Reply: >
Local Real Estate Revives as UAE market spirals down

Daily The News : November 12, 2008

As property markets in the UAE face a critical slump, local investors are turning away from the Arab countries and are starting to look towards Pakistan, Malaysia and Turkey


Brother CMY was absolutly right when he forecasted the condition of UAE market couple of months back

Allah Hafiz
Investor replied on Wednesday, November 12, 2008 07:01 AM 

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Investor replied on Friday, June 6, 2008 10:15 AM PST

1. By definition, every apartment or villa which is not ready to move in and you pay for its booking and/or installments is a File until it is completed and delivered. That is what file means. It does not necessarily means a file associated with a plot. Anything "Expected-To-Be a Material Asset" but not yet, is a File.

2. Most Dubai properties are just Files being sold from one owner to the next in a chain of MOUs with every person in the chain taking a piece of the pie (profit). This is no different from MLM and is destined to collapse sooner or later. No such business and no such idea has ever survived where without doing anything many people in a chain get profit at the expense of later ones in the chain.

3. At one time it reaches "The Critical Mass" where "The Chain" stops and "The Collapse" starts.
Pardesi, Jeddah replied on Wednesday, November 12, 2008 07:50 AM 

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Pardesi, jeddah replied on Sunday, July 6, 2008 01:54 PM PST

In the given politico-economic situation one should remain optimistic but realistic, though forces drag otherwise. Given the UK crunch lets see how many benefit before the UAE bubble burst; $5b per annum remiitance of expats have limited choices in Pakistan elsewhere than to go for real estate....
Khan replied on Wednesday, November 12, 2008 09:36 AM 

Well said investor

Do yourself and country a favour and realise that a property (land + building)in Pakistan is far more precious than an imaginary mortgaged flat in credit fuelled economies like UAE, UK and USA.
alpha replied on Wednesday, November 12, 2008 05:00 PM 

Newtons third law - bubble version : "what goes up comes down"
arsu replied on Friday, November 14, 2008 03:51 PM 

Dear alpha if i recall it right, Newton's third law was "For every action, there is an equal and opposire reaction".Some gravitational pull might be involved in pulling something down, that goes up.cheers
alpha replied on Monday, November 17, 2008 01:55 PM 

Dear Arsu Sahab

AOA, Newton Sahab was lucky enough to not deal with financial volatilities of our current times and had enough time to rest in a balmy summer day under an apple tree and ponder upon a falling apple.


Asset prices revert to the mean, how long does it take for mean reversion depends upon the number of irrational market participants, which are plenty in Pakistan and Dubai Real Estate Markets. Absence of derivatives and shorting of Pakistani/Dubai Real Estate assets further prolongs the time to mean reversion.

Newton Sahab's third law in the presence of gravity (i.e. real estate) will translate to alpha-coined bubble version.

My personal, rather naive, litmus test for a bubble is when you over-hear three conversations, on the street, over tea, or during a flight to Pakistan about a particular asset, just run away from that asset as quickly as possible.

regards
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