Excessive stocks of real estate, falling oil prices, currency depreciation and political turmoil are all “criminals” that have kept Dubai’s housing prices down.
Editor’s note: This article is from Daily Economic News author: Chenmeng Yu Lin Jingjing, authorized reprint
In Sanya, Hainan, the promotional copy of almost every luxury project is called “Oriental Dubai”. For the vast majority of people, Dubai is a city with a wealth of symbols and local tyrants.
In fact, as the most populous city in the UAE and the financial center of the Middle East, Dubai house prices have fallen by more than 30% since the peak in 2015, and are called “the worst performing first-tier cities in the global property market in the past two years. “.
Today, Dubai’s house price is only one-fifth of the “Oriental Dubai” luxury home. According to the latest data in the third quarter, the average house price is only RMB 25,000/m2.
With the example of the world’s tallest building, Burj Khalifa, its current price is now lower than in 2014.
The Savills report has pointed out that excess real estate inventories, falling oil prices, currency depreciation and political turmoil are the “culprits” that continue to drive down Dubai’s housing prices.
At the moment, housing prices in Dubai are still falling, and it seems to be nowhere in sight.
The world’s highest high-rise housing prices are deep in the buyer’s depth
The 828-meter, 162-story world’s tallest building, Burj Khalifa, has 1,000 luxury apartments in its building. In 2010, when the Burj Khalifa was completed, the price of a one-bedroom apartment could be sold for $800,000. When the oil price reached the peak of $100 per barrel in 2014, the house price rose to $1 million (the unit price exceeded $15,000/square Meter).
But now, according to Jones Lang LaSalle, the price of the original $1 million apartment has already been lost. “The final price may be less than $500,000.” Nearly a thousand investors have been deeply stuck.
The continued decline in house prices has caused Dubai to be advertised by local developers as a “global house price”. On the other hand, major international real estate consultancies are still bearish on Dubai house prices, predicting that they will continue to fall. And cautious buyers are holding a wait-and-see attitude, which also makes Dubai’s real estate transaction volume slump.
First Pacific Davis data shows that the volume of real estate transactions in Dubai in 2018 has dropped by about 22% compared to 2017. At the same time, with the view of Dubai’s right to host the 2020 World Expo in 2017, a large number of real estate developers have launched a number of real estate projects, resulting in a surge in market inventories.
“This yearDubai may complete over 31,500 homes, more than double the average annual demand in the city over the past five years. “” Dubai currently has 96,000 apartments under construction and will be completed by the end of 2020. “The Jones Lang LaSalle analysis report pointed out.
Dubai Housing Completion since 2014 (Source: Jones Lang LaSalle)
Buffett’s vote of confidence also prevents Dubai’s house price from falling
Although house prices continue to fall, there are still people who have voted for confidence in the Dubai property market. This person is investing in Buffett, a very valuable indicator of the wind.
According to Taiwan media reports, Buffett’s real estate agency BHHS and Dubai intermediaries Gulf Real Estate Co., Ltd. jointly established a new company and will set up a 30-person consultant and logistics team in Dubai. In August of this year, he announced that his real estate company will acquire 10,000 properties in Dubai.
In the real estate advertisements of many immigration agencies, “in the world’s first-tier cities, Dubai’s rental yield is two to three times that of Europe and the United States, 5.6 times that of Beijing, and 4.6 times that of Shanghai”, which is the data they use the most.
Daily Economic News (WeChat: nbdnews) The reporter consulted an overseas property agency. A location consultant said that to buy a house in Dubai, 100% of land ownership can be obtained, there is no public share, and the rental-to-sale ratio is as high as 10%. The rate of return is between 6% and 7%. A total of 1 million UAE Dirham property can be obtained as a permanent visa, or a family member can be a long-term relative.
Before the start of construction, the developer will pay 20% of the engineering fee to the land department to reduce the risk.” When the reporter asked about the recent decline in house prices, the property consultant attributed the main reason to “many project delivery, inventory increase” “You see that the foundation of Dubai is here, and it has been repeated many times.”
After all, for developers, knowing that there is excess supply, the house can’t be sold, but the construction site can’t stop, and there are even many workers from all over the world to feed.
The real estate boom in Dubai began in 2000. Some media reported on the construction of the time. “In many areas, looking up, in addition to the fascinating Dubai sky, at least one crane is indispensable. It is estimated that about 15% to 25% of the world’s cranes are in Dubai.”
As a super local city, Dubai is indeed a place where many people care about it – tax havens, lions are pets, police cars are Ferrari FF, “going to Dubai to move bricks” is also a dream of many people.miss you.
On the other hand, the media reported very little about the real situation in Dubai, and a large number of soft articles were put on, making the property market more mysterious. Those home buyers are just using the information asymmetry. For example, there are many real estate projects operated by Chinese companies in Dubai that are sold to Chinese people. The sales of new discs can be used to get a lot of commissions.
According to the analysis of Savills Middle East, Dubai’s overall housing prices in 2018 fell by 6% to 10%, and in 2019 it is expected to drop by 5% to 10%.
In addition, Dubai’s high property fees are the ones that property consultants are most willing to ignore. According to data released on the local website in Dubai in 2018, the property fee for the apartment is 12 to 24 Adirham per square foot, and the property fee for the hotel apartment is 3 times that of the apartment.
The latest exchange rate conversion, 1 United Arab Emirates Dirham = 1.9131 yuan.
According to this, a set of 80 square meters (1 square meter = 10.7 square feet) apartment, calculated according to AED 18 per square foot, annual property fee of nearly 30,000 yuan; a set of 80 square meters hotel In the apartment, the annual property fee is 90,000 yuan.
As for the permanent visa, it is actually a real estate investor residence visa, updated every 2 years, and at least once every 180 days to the UAE. In addition to buying medical insurance and other chores, if all the agents get it, the cost is 15,000 yuan + RMB. This is also the reason why the intermediaries are very enthusiastic when introducing the business. When you ask for an inquiry, you will say “come to the store to talk carefully”.
Of course, the above is not valid for the real rich.
The S&P Global Ratings released a report this year that the World Expo next year will not change the real estate market in Dubai. “Our view of the market is still very serious. Before 2021, housing prices in Dubai are unlikely to rebound.”