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    • Criminal Complaint filed against Al Fajer Properties Sheikh Maktoum
      Criminal Complaint filed in Germany against Sheikh Maktoum Hasher Maktoum Juma Al Maktoum CEO of Dubai Developer Al Fajer Properties The Dubai Sheikh who mislead and extort a German Couple  Germany – Dubai 2011 A German elderly couple , today 80 + 50 years old who have been Dubai Tourists since a decade, bought in 2005 an apartment at Nakheel´s Dubai Residen […]
    • UAE: Human Rights Blogger, Sorbonne Lecturer Charged With ‘Humiliating' Officials
      source Human Rights Watch www.hrw.org (Beirut) - The United Arab Emirates attorney general should immediately drop all charges against five pro-democracy activists to halt their trial, Human Rights Watch said today. The charges of "humiliating" top officials relate solely to the defendants' peaceful use of speech to criticize the UAE governmen […]
    • Nakheel Dubai Sunland Case
      June 5, 2011After 21 hearings, Chris O'Donnell, the Australian chief executive of Dubai's major developer, Nakheel, came to the defence of his former colleagues Matthew Joyce and Marcus Lee. Mr Joyce and Mr Lee are accused of profiting from the sale of land that had been earmarked for a colossal high-rise development, which was to include the futur […]
    • Dubai Nakheel CEO decided to leave the company
      Dubai June 7, 2011 Nakheel said on Wednesday that its CEO Chris O'Donnell had left the company "after completing his contract terms". O'Donnell, an Australian who joined the developer in 2006, said he had decided to leave Nakheel following five years spent with the company, the statement added. O'Donnell has overseen a traumatic time […]
    • Owner of Dubai Developer Damac Hussain Sajwani files case against Egypt corruption ruling
      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
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Archive for November 10th, 2008

Slowing property market leads to disputes – The National Newspaper

Posted by 7starsdubai on November 10, 2008


Slowing property market leads to disputes – The National Newspaper

Abu Dhabi // Dubai

As developers and buyers feel the financial pinch of the slowing property market and dampened global growth, the two sides are getting into more disputes, lawyers and analysts say.“Whenever you get turmoil, you get disputes,” said Chris Dommet, the chief executive of the Dubai office of mortgage broker John Charcol. “When everything is going well and everyone is making money, everything is fine. But when the market moves the other way, you get disputes all along the way, from developers to banks to clients.”

Most of the fallout is coming from buyers who assumed prices would keep rising rapidly, those having difficulty obtaining financing for their purchases and those who are only now realising their contracts were not what they expected, said Tom O’Grady, a partner at DLA Piper in Dubai. “We are seeing higher levels of inquiries from buyers about their options,” Mr O’Grady said. “It’s coming alongside the sort of quieting of the market.”

Buyers at Hydra Village, a residential community of 2,500 houses near the Abu Dhabi airport, said they recently saw the prices of their homes unexpectedly rise by as much 15 per cent when Hydra Properties announced a redesign of the project with larger homes.

Carolyn Munson, an American who owns two two-bedroom houses in the project, said the decision to increase building sizes should not have been made without the consent of owners.
“They are imposing decisions on our behalf and that’s unfortunate,” she said. “This would have been one thing if we had contracts early on, but at this point we have zero recourse.”While some buyers said they welcomed the expanded floor plans and considered the rate for the extra space reasonable, some complained that they were not given an option about whether to accept a larger home. There were also concerns about raising the financing required to meet the higher prices, especially for those who had bought several units.

Under the plan, the additional cost would be based on the development’s original prices and come due upon completion in 2010.Sulaiman al Fahim, the chief executive of Hydra Properties, said the designs were changed because the original plan included houses that were too small. The overall project did not incorporate enough green space, he said.“We tried to make it a really green development so we changed the whole masterplan to reduce the density, make more green areas and build green buildings,” he said. Many of the villas were “too small for a normal family to live in” and were expanded by 107 to 129 square feet. He said the company had received positive feedback from buyers.

Meanwhile, in Dubai several buyers said they were refusing to pay their next instalment for homes they bought at Emaar’s Warsan Estate project because they were not informed of a sewage plant being built close by.“We were misled and then let down by Emaar,” said Arshad Hussain, one of the buyers refusing to pay.
He said he had been pressured into buying the property in a rush.“Once I realised about the plant, I informed my family and they said they wouldn’t want to live next to a sewage plant” said Adel Momar, an Australian citizen who had bought a villa for his family. “From that time I tried to sell this villa. But no one wants to buy it. Everybody just laughs.
Some buyers have even tried to put theirs on the market Dh30,000 (US$8,166) below the opening price and have not succeeded.”
Emaar officials said the company properly informed customers and behaved appropriately. “Purchasers have been adequately informed, as is the case with any of Emaar’s projects, including Warsan Estate,” a spokesman said.He said Emaar had provided a detailed map showing the location of the development.Similarly, a group of investors said they lost 5 per cent of their investment in just weeks when Damac Properties suddenly cut prices.

Matthew Mueller, a managing partner at Mueller and Namejko in Washington, said he and his partners had bought a full floor of Burjside Terrace as an investment. Because they bought in bulk, they were given a 5 per cent discount, but five weeks after the purchase, Damac dropped prices by 10 per cent, he said.“It would have been pretty good information to receive before we bought,” he said of the price cut. Mr Mueller said the group was eventually able to transfer his investment into some other properties with the company in the hopes that they could salvage their initial investment.
Niall McLoughlin, a spokesman for Damac Properties, said the price cut was part of a Ramadan special offering and the company had acted appropriately.“Like may companies in this part of the world, we have festive promotions around Ramadan, Eid and Dubai Shopping Festival where we offer discounts and value additions,” he said.

The disputes are leading to calls for more regulation.Fadi Antar, the operations manager of Better Homes Abu Dhabi, said confidence in property developers’ ability to deliver projects on time and according to their promises would become essential as the market matured. He said the municipality should regulate areas such as stage payments, completion dates and sales contracts and respond swiftly to the concerns of investors.

“At the moment, the only option for a client with a serious complaint is to sue,” he said.

bhope@thenational.aerditcham@thenational.aengillet@thenational.ae

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More than Dh22 billion was wiped out on the day.

Posted by 7starsdubai on November 10, 2008


read more:
Gulfnews: Banks and real estate drag Dubai’s index to its lowest close in 45 months:

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U’AE – Regional markets sell-off continues – The National Newspaper

Posted by 7starsdubai on November 10, 2008


Regional markets sell-off continues – The National Newspaper

Andrew Foxwell
Last Updated: November 09. 2008 8:03PM
UAE / November 9. 2008 4:03PM GMT

Regional stock market indexes fell yesterday as the deteriorating global economy and fears of an international recession took their toll. There were even calls for the Government to move to halt the domestic declines.

The Dubai Financial Market (DFM) lost 5.94 per cent of its value, falling to levels not seen for more than three years.
Hardest hit stocks included the developer, Emaar, which was down 9.94 per cent, leaving it near a four-year low.

Emirates NBD lost 7.07 per cent of its value, leaving the bank’s stock at its lowest level since Dec 2004.

The real estate indexes of the DFM and the Abu Dhabi exchange dropped by 9.55 per cent and 7.85 per cent respectively.“UAE real estate stocks are taking the biggest hit in the region amid the current global financial downturn,” Ayman el Saheb, the director of operations at Darahem Financial Brokerage, told Zawya Dow Jones. “
The real estate market is buzzing with unconfirmed talks of projects being delayed or cancelled and a fall in property prices, and this is further hurting sentiment.”


Abu Dhabi’s index was also hit heavily, closing down 3.95 per cent, while Kuwait’s crisis-hit market lost 2.79 per cent of its value. Doha was down 5.19 per cent, Muscat lost 2.6 per cent and Bahrain shed 1.66 per cent.The Saudi Tadawul was the only Gulf market to post a rise, with the index closing up 1.82 per cent.Robert McMillen, the chairman of Mac Capital Advisors based in Dubai, said people were “at a loss” to understand the collapse.
He said some stocks were trading below issue price, which investors saw as “horrendous”, but that it was not heavy selling that was pushing the prices down.“

The volumes are not staggering. I don’t believe you’ll see significant selling any more. We will be heading in this direction at least for the rest of the month.”He dismissed the belief that falling oil prices were having a major impact on stock prices.Vyas Jayabhanu, the head of the broker Al Dhafra in Abu Dhabi, said investors had been disappointed that the Government had provided liquidity to the banking sector, but not to stocks.He called on the Government to take stakes in listed firms and hold them for several years to boost markets and liquidity and provide stability.“

The markets are disappointed the Government has taken no steps to support the market, because they were expecting it after it provided help to the banks,” he said. “Speculators and investors wanted something to coax them into buying.”

A head of an Abu Dhabi-based asset management house said at the moment it was “wait and see” time for the markets as investors tried to gauge the effect of the global interest rate cuts. Last week, the British and European central banks slashed lending rates to stimulate debt markets, while the week before the US Federal Reserve lowered interest rates by 50 basis points. The Central Bank has yet to follow suit, even though the dirham is pegged to the dollar.

mailto:dollar.afoxwell@thenational.ae

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Property cloud nine now looks stormy – The National Newspaper

Posted by 7starsdubai on November 10, 2008


Property cloud nine now looks stormy – The National Newspaper

If you’ve bought property in the UAE these past few years, you have enjoyed a thrilling ride. While no official data on prices exist, reports suggest they have skyrocketed since at least 2006, notching high double-digit returns and beating even some of the world’s best performing assets.And according to a recent HSBC report, the sector may still be booming. Prices in Dubai jumped 17 per cent in September alone, it said, after registering gains of 2 per cent and 3 per cent during the summer.

In recent weeks, however, the argument for buying property has become less convincing. One report last month suggested that prices were rising at a slower pace. Meanwhile, some developers have tried to curb speculation, banning investors who were buying apartments off-plan and then selling them in a matter of weeks, sometimes at more than double the price. And in the past few weeks, stories have emerged of cash-strapped buyers unable to meet their monthly payments and builders having trouble selling their units. Deposits on mortgages have gone up, too, because banks and mortgage lenders are finding it harder to borrow money as the global credit crunch stretches into the Middle East.

While discouraging speculation is doubtless a prudent measure in the long run, none of this news bodes well for property buyers. Perhaps even more troubling, though, is the havoc the financial crisis could wreak on property in the Middle East. Most of the demand for property comes from people living outside the UAE – in places such as India, Pakistan and the UK. According to a recent Citibank report, only 24 per cent of those who bought properties from Emaar, the region’s largest developer, are UAE citizens. Most come from Asia and Europe.

These investors have seen the value of their global stock portfolios decline dramatically in the wake of the financial crisis. Already, foreign investors on the Dubai Financial Market have been net sellers of local stocks, helping to wipe billions off the value of listed companies. When global markets go belly-up, international investors have less money to throw around on property. At best, that translates into slower sales in booming markets like ours. At worst, it could lead to declines.

So, is the UAE still a good place in which to buy?

The answer depends largely on your circumstances – if you are looking for a quick profit by speculating on off-plan property, it’s a resounding no. As the Government works to bring a measure of sanity into what had looked like the beginnings of a bubble market – one in which off-plan properties were selling at the same prices as those already completed – speculators will doubtless feel the pinch. A drying up of demand in off-plan units resulting from the Government’s actions has already left many speculators stuck with properties they never intended to keep.

“The speculative off-plan end is going quiet, and people who put down 5 per cent deposits and expected to get out quickly are now left with properties they can’t sell and can’t finance and don’t have the cash to make payments on,” says Chris Dommett, the chief executive of the property consultancy John Charcol Dubai. “There’s going to be a huge oversupply of property in the off-plan market for the next few months. Developers are going to find a lot of product returned to them.”

However, Mr Dommett says it makes sense if you are buying because you need a place to live, especially a completed villa or apartment. There is a downside, though: Because of the recent financial turmoil, a lot of banks are asking for a much bigger down payment. Amlak and Tamweel, the UAE’s two big mortgage providers, recently raised their minimum down payments to about 25 per cent, and many banks have followed suit. These days, the least you will be able to put down on an apartment or villa is about 15 per cent.

In the end, that is a good thing, because it forces you to start off with enough equity to cushion a possible downturn in property prices. For buyers who are just coming to the country, though, coming up with the necessary cash may be a big issue.If a down payment is what is preventing you from buying, don’t worry. Conditions in the lending markets are likely to improve in the next year or so as global credit conditions slowly improve and banks become less hesitant to lend to each other.

Despite the problems that have arisen in the past few weeks, the demographics of the UAE support the argument that you won’t lose if you buy property and keep it for a decade or so.
The population is steadily ballooning as foreign workers stream in, and those people need a place to live. If anything, the financial crisis may mean more migration because of dimmer job prospects elsewhere.“If you look at the fundamentals and ignore the off-plan speculation, the population is increasing as people arrive here and there’s still a shortage of finished product,” Mr Dommett says.

“The alternative is renting, and rents are not coming down. Although things are quiet at the moment and people will be taking a wait-and-see attitude for the next couple of months, demand for properties to live in is going to be strong, which implies prices will firm up again. The market will have some of the heat taken out of it because you won’t see the same amount of speculation as before. But it will still be a good investment.”
mailto:investment.”afitch@thenational.ae

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