Off-plan residential property sales in Dubai fell by 30% in 2018
We are now in the 5th year of a massive, continuos and permanent decline in Dubai real estate.
Since 2017, the media and so called people who understand real estate like Damac Properties or S&P are saying that prices will drop for “next 2 years”.
Again in 2018, they said “next 2 years”.
Now in 2019, they repeat the same “next 2 years”.
However, we have been very precise in our prediction that there is ZERO chance of any recovery in Dubai since 2015 and it will keep dropping until it hits zero.
There will be no bounce back, no recovery, no rise, ever again!
Now the media says an avalanche is coming!
Really? They must have figured it out all by themselves post facto in 2019 after watching the collapse since 2015! Smart fellas! 😂👌
Do enjoy the coming avalanche! 😜🔥
UAE got boomeranged!
UAE (and Saudi) banned Qatar as everyone knows in June 2017, but now UAE is complaining that Qatar has banned them in retaliation and crying in front of the WTO.
Could not get more hilarious.
UAE is hurting beyond imagination and their economy is tumbling every single minute of every single day.
Most GCC focused pharmaceutical companies are based in UAE free zones and Qatar plus Iran and Turkey and Yemen are no longer accessible to them and they are losing heavily.
Almost all goods coming from UAE to Qatar have been banned. They have also excluded all contractors and developers from accessing the Qatari market.
There are some things that happened at the Asia World Cup this week in Abu Dhabi (aside from throwing shoes on Qataris) that we cannot mention here that shows a lot of arrogance and hatred towards Qatar by UAE.
UAE files trade case against Qatar over goods ban
Not only in Dubai, real estate falls from Australia to Canada. UAE integrated into in the global financial system. I talked with a man who works in the government of Russia. He told me that the UAE would be in a better situation than countries in the west. The UAE is under constraction a nuclear power plant and western countries are closing nuclear power plants.
ReplyDeleteAs I wrote to you already and gave the link "why oil cannot be expensive," development requires cheap energy, while the West does not have it.
The worst crisis in the global financial system is approaching. I am watching what is coming in from 2010. If they hadn’t started printing money (QE 1,2,3) in 2008, the world would have changed, but no, they delayed the inevitable.
Thank you for informing people. A lot of people still do not understand and can not imagine what the financial tsunami is coming to our world.
Best Regards
Hello AB,
DeleteThank you for continuing to visit and for your comment.
Yes, fully agreed, worldwide real estate is collapsing with 2 exceptions being China and Philippines.
Been warning of the same since a few years but on the blog firstly in Aug 2018.
https://voiceofthemarkets.blogspot.com/2018/08/worldwide-property-prices-are-in-free.html
There indeed will be a major crisis but it will not be what we think because every country is better prepared than they were a decade ago. Basel 2 and 3 laws and new accounting and more insulation from each other is there. Everyone has tried to safeguard and is managing risk better than before.
We will have slow and individual company or individual country collapses.
Individual companies means high risk of bans, debt or low demand. We have seen Sears, Bon Ton, Toys R Us and PG&E collapse in America. Nowhere else are we seeing so many bankruptcies outside of USA.
Individual countries means Venezuela, Iran, Zimbabwe, now building up in South Africa, parts of Africa or Latin America, Ukraine etc. Look at India, it's a large economy but their banks, businesses, FII, interest rates, pollution, terrible infra, employment are all falling apart. It's so bad that hundreds of millionaires have run away from India for the every first time in history despite everyone having strong political connections.
Both these will keep rising individually.
That is a global collapse in progression where everyone else tries to survive hence it's important to be in growth economies like China or Philippines.
Global financial system has changed over the last decade as well. Today we have Chinese yuan which is 5-6% of global trade at No 5 or 6 in the world. This will shoot up as soon as oil by Saudi gets priced in yuan to No 2 or 3. Most china trade is trying to be done in yuan instead of USD. this never happened a decade ago.
30-40 countries now have a payment system with China as back up instead of just US dollar or EUR. Russia and china have their own internal payment systems, tech, space, food, oil, factories and rising service sector so they really don't care what happens outside of those 2 nations so there will be minimal impact on 1.6b people in those 2 countries. Thats a lot of people.
Reserves are held more in gold and Chinese yuan than just a decade or two ago.
These are all "insulating' factors that prevent one economy or company from collapsing should their trade partner collapse.
Like always in history, we will never be able to predict when the financial system will collapse. Because it will be replaced by something else.
Spain collapsed, France collapsed, then British also collapsed and now America is going to collapse. But it will be a multi polar system until China becomes so big that it is not possible for them not to lead the world.
But Americans will keep pointing at others that they are collapsing while the entire American house is on fire.
Trump is again interfering in Venezuela, like they did in Ukraine and before then in entire Middle East. Maybe Americans get an orgasm when they destroy an entire nation with humans or maybe they do it because some top people make a lot of money by siphoning off money when military purchases and deals are made. I don't know.
It is very sad whats happening in some countries like Zimbabwe, Venezuela, Syria, Iraq, Libya, Yemen, Afghanistan and now Paris and other cities where people are fighting back. So many Presidents or PM's and top people have been sent to jail like in Brazil, Pakistan, Korea and Malaysia etc. China almost sends a top person to jail every week for corruption which is cleansing the system and making it stronger.
2/2...
DeleteWe have a natural balancing also occurring whereby new politicians are emerging like AOC in US and Kejriwal in India and Austria/Hungary etc who just wish to go as the public wants, somewhat China and Russia do the same as well.
Entire world is shifting slowly. some better and some worse. the old will be replaced by the new and in this transition many a fortunes shall be lost especially in the West and Middle East. but that money will flow to the East because money is a zero sum game.
We will have problems but they will be associated with US dollar and their allies and in their countries. Others will be become better off and all those aligned with OECD or USA or EU will suffer the greatest.
Hope this helps.
Thanks and best regards,
Financial Collapse - Europe Will Collapse - Why It's Inevitable - Part 1
ReplyDeletehttps://www.youtube.com/watch?v=YtMw9k3M9us
I recommend to see
Hello AB,
DeleteI saw this and I don't really agree with the speaker.
Europe is a union of 29 member states. They will disintegrate the EUR as they should since it's a flawed concept. But Europe collapsing, I doubt it.
Their banks will keep sliding and collapse when necessary like Portugal or Cyprus.
They grow food, for the most part they are hard working, they export a lot. They have 500m people. Their tourism from abroad is rising.
Their 3 weaknesses as of now are EUR currency, refugee crisis and some issues in their banks.
Like Iceland and Spain have tried, others will also come through with their bank problems or shut them like Cyprus or Portugal. Such bank difficulties are global not just EU or US so everyone is trying to help each other.
Yes some people will lose money but others will make.
I pity the youngsters who wont have as lucrative jobs and successful lives as their parents did but that is a result of overpopulation and is a global phenomenon not specific to EU.
EU has mostly ageing people which also is their weakness.
But one or two bank collapse will not breakdown the EU.
Hope this helps.
Thank you and best wishes,
I myself from the EU. I agree with you half. Germany only exports and lends money to all kinds of Greece. The rest simply consume and inflate the property. Previous generations lived in debt and made such big debts, the new generation (millennials) should go to work in factories and compete with China. Euro it was a big mistake for economies such as Spain, Greece, Ireland, etc.For example, Russia buys equipment from China because it is cheaper and is not inferior in quality to Europe and so many do it like this.
DeleteIn any case, we are small people and just watching what will happens.
Best Regards
I was born in the former USSR, now I will take Russian citizenship,not yet changed the laws of citizenship. I see how the Titanic (EU) is sinking.
DeleteHello AB,
DeleteOverall, agreed with your assessment but to break EU will take a lot. Russia needs to sell gas to EU which is why we have the Syrian conflict.
It is not as easy as saying EU millenials should go to work. Millenials worldwide are softer because their parents spoilt them, jobs are not there. Debt is a problem at corporate and Govt level not as much at individual level. Without jobs there can no money circulation and with low money circulation, everything must drop in price or demand causing bankruptcies.
Despite overpopulation, we have lack of jobs, which proves that demand of goods is dropping.
We are in a domino affect worldwide since 2014. I predicted that in Sept 2015.
https://www.linkedin.com/pulse/demand-destruction-causing-permanent-declines-etc-while-manoj-nathani/
EU is more softer on Russia today than it was just a few years ago. they need the gas.
Russia is a good citizenship but can keep dual.
World will keep evolving but giving up citizenships or rights may change a families life forever.
Nice to discuss with you your thoughts.
Thank you and best wishes,
Hello AB,
DeleteIf you have not seen this, though it's 8 years old, it's a must watch for anyone who thinks EU will survive.
I know you already believe that EU will collapse.
But it's so truthful and yet funny at the same time. If one thinks about it, it becomes scary!
And the ending is perfect, that everything is owned by China anyways. That's what I have been saying for a decade now.
Clarke and Dawe - European Debt Crisis
https://www.youtube.com/watch?v=I5QwKEwo4Bc
HI Manoj,
ReplyDeleteI think you're doing brilliant work here and I read all of it with great interest. I think some of your language is slightly hyperbolic but the message and themes extremely accurate. So thank you.
I have one question around your thoughts regarding Australia. My sense is that it is slowly slipping into a fairly major recession which in the case of the unique dynamics of that country will probably result in a depression. Property is clearly wildly overvalued and needs a 50% drop to even be considered reasonable. Incomes are falling, businesses closing, quality of job and job types are falling along with societal decay which vast parts of the population either on drugs, abusing alcohol, homeless etc etc which I have seen increasing first hand over the past 3 years in particular. Then there is the highly complicated tax system and the welfare state to deal with too.
What are your thoughts on Australia's prospects moving forward?
Australia will go down. Australia supplier of resources to China, China slows down and Australia collapses. With real estate will be the same as with Ireland in 2008.
Deletelook about australia.
https://www.youtube.com/channel/UCKWDscRjYFTD1KHsmow4-bQ
It is good that you started watching what is happening in the world.
Hi Anonymous,
DeleteThank you for your comment.
If you find some hyperbole, do point it to me, on what matter? Because in the business of reality and future predictions, things do look exaggerated but overall I have been right on my predictions for about a decade now.
Australia is linked to China very strongly as well as global economy. As you correctly described things are not so good on the ground. It is definitely slowing and worrisome.
Fortunately, they have allowed the currency to depreciate almost 40% in the last 6 years. If AUDUSD breaks down further and drops to 0.60 or 0.65 cents then you need to worry even more. I expect it to happen.
Tourism is holding up, but everything else is in bad shape.
This week's banking testimony was another factor to show that bankers are doing fraud.
Money velocity is shrinking worldwide which is hurting everyone. Australia has 20m odd population spread on a large pice of land, so doesn't have a lot of cushion. Canada has 36m, US has 335m etc.
Australia will continue slowing down and their fate is to be determined by China.
By brining foreign buyers taxes on property, Australia has stopped money flows and Chinese investors.
All countries who are banning Huawei (under their five eyes project) including Australia will pay a heavy price. As of right now, no one seems to be backtracking and matters seem to be escalating.
Huawei does not do spying, Apple, IBM and Cisco do spying.
Western media has tarnished Huawei and China a lot and whoever doesn't have a cosy relationship with China will pay a heavy price economically. China will use investment flows and tourism flows as a weapon because it is so lethal.
Please keep an eye on AUDUSD, if you see it drop below 0.68 level, then things will get worse in Australia.
Once real estate corrects further in 2019, we will see more job cuts and more pain in retail, banking etc everywhere.
Just remember, China is the key, as AB also attested.
Hope this helps.
Thanks for the reply!
DeleteI tend to agree with all of the above.
The reason I ask is I am based in Dubai for ten years but as you have rightly pointed out, a plan B is needed. I have options to go to either Australia (which I am reluctant to do) or Singapore. How do you see Singapore going?
Many Thanks!
Hello,
DeleteIt depends on what sector you are in and whether you have source of income or job worked out? If it's business, then very few sectors will do well in Singapore because like Dubai it's expensive and they are having an anti China stance for the last several years so they are slowing but not collapsing in Singapore.
It all depends on where you have a source of income but I would have first preference on Singapore despite it being expensive overall. Also depends on what your long term plans for retirement, kids, family, education of kids etc are? It's not great anywhere but one must get out of GCC while they still can.
Not knowing a lot about your situation, it's hard to elucidate more than this.
Thank you and best wishes,
Hi Mr. Manoj,
ReplyDeleteThank you very much for your articles in this blog. The first article I read on your blog was the "Entire GCC Crumbles like a pack of cards....". Since then I've been looking forward to your every article.
With what is happening in Europe, US and Middle East it seems economic power is now shifting to Asia which I don't think Europe or US will allow which may lead to security threat in the region particularly in the South China Sea. With the US and UK defense unit "patrolling" the so called disputed area in which China has a very strong presence there.
What are your thoughts about the health industry in a global perspective? I've read your article about cannabis being the top trend in business in 2019. Despite the grim outlook in the Middle East will this industry has a chance to survive in this region?
Obviously, I'm an expat based in ME for the past 12 years and I'm seriously thinking of Plan B.
Again, thank you very much for your generosity in sharing this information and insights. I'm really an avid reader of your blog especially the comments.
More power and God Bless.
Sincerely,
Christina
Hello Ms Christina,
DeleteThank you for visiting regularly and for your comment. Much appreciate you reading and hopefully gathering some new and unique perspectives.
Power is indeed shifting to Asia (specifically to China) and there is absolutely nothing that US, EU or ME can do about it.
China is the only country in the world with trillions in reserves and hundreds of billions in imports (guess what every nation wants to do: export!). Let's not even discus that China is thee largest trading partner of more nations than America. Who would want to fight with the owner of their electronic seller, supermarket, department store and largest oil buyer and largest travel population with largest factories of everything, combined? :)
Many say that China lies about everything. I agree. What if they are lying about their reserves and they are double?
What if China is lying about their debt and it is half?
I request you to stop reading any media from USA, EU or ME. They are brainwashing you and placing more nonsense in your mind.
There are many China news websites in English but their articles do not come in search results of Google. I recommend you to search for those websites, bookmark them and read them regularly.
China has done so much to eradicate poverty that no other country in the world has ever done in human history. In the next 4-5 years, there will be no "poor" people in China, as per definitions of poverty of ILO or World Bank etc.
All these news do not make global headlines because Bloomberg, Reuters, FT, major newspapers, they love to hate China because ALL of them combined are losing to China.
China’s record in poverty reduction unparalleled in human history: British expert
http://www.xinhuanet.com/english/2018-04/23/c_129857170.htm
The Global Significance of China’s Poverty Reduction
http://www.chinatoday.com.cn/ctenglish/2018/commentaries/201806/t20180629_800133983.html
Nothing will happen in South China Sea except for the rise of China which is unstoppable. If USA intervenes they will find out that only China can decimate US Navy and their Airforce.
Why do you think USA has been unable to stop China's building up of military bases in Djibouti, South China Sea, Russian border, Africa, Pakistan and so many places for the last decade?
Because they can't!
China and Russia put together and individually have such technology in military, space and tech that Americans can only dream about and 95% of it is unknown to the public and 80% is unknown even to US military experts.
Even Philippines set aside their win in UN after a decade and shook hands with China and allowed them to do anything in South China Sea (Spratly Islands dispute) due to which within 24 hours of shaking hands, China navy left the borders of Philippines in international waters within 24 hours.
Coming to health industry, overall the trends are positive and will remain so because human population is rising and every decade we have new and more stronger and mutated diseases so demand keeps rising.
Pharma, like alcohol, guns and tobacco and food are major lobbies for the rich and will remain so, they will never shut down or slow down so easily.
2/2
DeleteIf any demand slows, they create a war to increase military sales, pharma sales etc.
Middle East is a different story. It can never be long term. Partly due to crisis (1 Filipino hospital shut in Dubai last year), partly due to localisation (pressure to hire more locals in all hospitals), partly due to non payment (UAE stopped payments for locals travelling to other emirates and for 1 year, they also had started a 20% or 30% co payment for locals), partly due to politics (ban on Qatar, war in Yemen, ban on Iran, Libya etc) and partly due to lack of funds (several hospitals have been in trouble in UAE, lets see who gets sold off or closes next). Iranian Hospital should also shut this year after about 47 years.
Wages will keep going down and so will service quality. Rich will go wherever they want and like in any nation, poor and middle class wont be able to have good health care in ME nor will be able to travel for medicare. So it's their choice to continue to remain in ME.
Overall, healthcare opportunities, wages, facilities will keep slowing down in ME.
Just last month, UAE allowed any doctor from anywhere in the world to come and practice for 6 months. They are really in a tight spot and system could even collapse due to lack of patients and lack of funds.
Dubai announces new 2-year 'Visiting Doctor's Licence'
https://www.khaleejtimes.com/news/uae-health/dubai-announces-new-2-year-professional-licence-
Other countries will somehow carry on . Most countries hospitals are opening or closing. Chaos is everywhere but highest in the ME.
Stability in career or incomes is a thing of the past which is what is impacting sales of everytihng because people are saving more than they used to it in the past or have crisises like job losses in the family or their own or medical expenses etc which causes further slowdown in everything around us.
Hope you find this useful.
Thank you, best wishes and God bless,
Hi,
ReplyDeleteI own and run a mid to large real estate brokerage in Dubai. We used to do over 500 resale transactions a year between 2012 and early 2015. Last year that dropped to under 50. We are surviving on a lot of rental transactions which due to falling rents, have picked up a bit. These days, almost all the real estate agents across all brokerages are trying to sell off-plan where the builders are offering up to 10% in commissions to the brokers. After initially working with these developers, we decided not to sell anymore offplan from ANY developer. Anyone getting enticed by these 5-10 years payment plans offered by Emaar, Meeras, Dubai Properties, DAMAC is literally committing financial suicide. FIRST of all, the price points are not very attractive. SECONDLY, past experience has shown that the offplan projects are delayed in the best case by 2-3 years. THIRDLY, you are bound by a completely one sided agreement for the coming decade. FOURTHLY, if you delay a payment, these developers will file a criminal case with the police AND civil case in the courts on top of 15%+ interest charges. And LASTLY, if you default on a payment, you lose the property along with all the previous instalments. All of these is clearly mentioned in the sales and purchase agreements (SPA) and yet it is a shame that over 5000 agents are aggressively selling these to the ignorant and in some cases innocent buyers. I very strongly recommend NOT to buy any offplan from any developer. If anyone believes that this downturn presents an opportunity then explore some of the ready properties which are offered at extremely distress prices.
Hello,
DeleteThank you very much for your very valuable comment and for being a reader of this blog.
This is what we have been advising since 2015, now we have some clients who purchased off plan properties with the top developer, and those projects despite being done with a top Canadian contractor have come to a halt. This is just one case, we have so many.
If anyone didn't listen to us, then we really cannot help them. They are adults and make their own decisions but are all in a mess now with losses in millions.
Real estate companies like yours will survive but only the largest ones like yours.
But sad to hear that your volumes have dropped almost 90%.
Developers owned by the Govt are selling so cheaply that all private developers will die since Govt developers have repriced the market to such ridiculous prices and long term payment plans that private developers who launched anything in the past several years simply cannot survive or sell at such low prices that are way below their cost levels that are signed agreements with all sorts of suppliers and contractors.
We also know so many people who were having brokerage companies from 2-3 employees to 10-20 employees and all have been shut. Only larger ones can sustain themselves henceforth.
You are 100% accurate that investing in a country where the contracts are completely one sides is FINANCIAL SUICIDE plus the visas can be revoked or a nationality banned at anytime.
We know investors who now receive calls from these developers with threats of police cases.
If anyone knows what's happening inside all these top developers from job cuts to lawsuits or hefty commissions to contracts etc, they will never buy anything ever.
Even ready properties we have seen since 2018, that there are no buyers even at distress prices in top areas.
We wish everyone the best of luck who are invested or are considering to invest in UAE.
But we caution everyone not to invest unless it's for their own residence and is 100% cash paid and they are wiling and able to lose half their money even in this case despite buying at the lowest price since 2004, in 2019.
Thank you and best wishes.
A friend of mine who owned a 2 bedroom apartment in The Greens had a tough time to sell. Once upon a time it was impossible to get an apartment. They had to wait nearly a year and sold the apartment much below the price they wanted. Don't know why newspapers give false and misleading reports.
DeleteHello and Good day,
DeleteThank you very much for visiting and for your comment.
Actually, your friend was lucky if they sold in early 2018 and were able to get out.
We know people who have been on the market for almost 3 years now and unable to sell. As we have predicted that the market will keep dropping every month of every year since 2015, which is precisely what is happening.
Hence, whoever, waits and thinks that Dubai real estate price may bounce a little or some buyer will turn up who may be willing to pay more than last year's price or closer to their expectations will be extremely upset, just like what happens when a stock price keeps falling and falling because the company is bankrupt.
He is lucky that he sold within a year, perhaps because most folks don't have the holding capacity of multi billionaires and criminals who operate in Dubai so once they have some job distress or family distress or visa distress, their life comes to an end and they need to sell at any price, which is what is happening since 2016.
Newspapers will always give false news in Dubai because Dubai is an absolute monarchy, where the developers, media, real estate bodies, courts, police, Govt, hospitals, visas, businesses, property management companies, utility companies, water companies, banks etc are ALL literally owned by one person. Therefore, there can be no negative news that can be critical or forecast about what's happening will ever be allowed until they totally collapse and go bankrupt.
Just last week, the real estate index fell heavily again.
https://www.bloomberg.com/news/articles/2019-02-10/dubai-property-glut-on-show-in-worst-week-for-stocks-since-2016
About 2 weeks ago, the top most Dubai real estate developers like Emaar and Nakheel both wanted to issue USD bonds but the interest they wanted to pay and what the market demanded was so far apart that the bond issuances were cancelled.
Even Reuters is lying that prices are down 6% to 10% in 2018, when we all know that the price drops are much more and what they also hide is that prices are dropping continuosly since 2015, and if we assume 10-15% drop every year since 2015 to 2018, the average price drop alone is 40%-50% plus. But it is our estimate that from the peak of 2014, the price drops are anywhere between 50% to 70% depending on the location and even then due to the massive number of sellers, buyers are almost impossible to find or close.
https://www.reuters.com/article/emirates-realestate-bonds/update-2-dubai-property-developers-put-bond-plans-on-hold-sources-idUSL8N1ZL1XS
This shows that their crisis has not yet ended and the global markets and global investors or even Middle Eastern investors do not want to give any money to Dubai developers because the risk is sky high which is happening for the first time in their history and has most likely come as a big shock to them.
As we always say, since 2015, the worse is yet to come...
All countries lie in the media, tell how everything is good and that tomorrow will be better :))).All countries have debts and all will be bankrupt. No one will give these debts back in the current system. Because no debt, no money in your pocket.
DeleteToday’s financial system will be reformed completely and very soon and all debts will be impaired by controlled hyperinflation.
Am in love with your page. Wait impatiently for new posts and your comments.
ReplyDeleteHow are companies like DANUBE announcing new projects?
Hello,
DeleteThank you for your comment and visiting the blog regularly. Really appreciate it.
Very happy that you enjoy reading my perspectives.
Sorry, unable to comment on specific companies.
Thank you and best wishes,