Two decades of Dubai real estate cycles

After a five year bull run, Dubai's real estate market is experiencing its first major correction. But corrections are part of every healthy market cycle. Simon, Steven and Paul sit down to share perspectives from two decades of navigating Dubai's real estate landscape—including the 2008 downturn and everything since.

In this conversation, we explore what's actually happening on the ground: where buyer activity is coming from, which segments are seeing the most movement, how payment plans are shifting and what the 420,000 units under construction mean for the market ahead. We also dig into the fundamentals that matter during uncertain times: developer quality, location dynamics and the difference between short term speculation and long term investment strategy.

Whether you're actively investing, watching from the sidelines or simply want to understand how experienced operators think about market shifts, this episode offers practical insights from people who've been here before.

Beyond the Vanity Metrics report:
https://bit.ly/4d29gOJ

The haus & haus Investment Playbook:
https://bit.ly/4lLjXsG

Follow us on social📱:

Instagram: https://www.instagram.com/hausandhaus/

LinkedIn: https://www.linkedin.com/company/haus-&-haus

YouTube: https://www.youtube.com/channel/UCCwIfy-QwCfMZG4DZNVrtJg

TikTok: https://www.tiktok.com/@hausandhaus

Facebook: https://www.facebook.com/hausandhaus

Transcript

SPEAKER_00 0:00

Hello and welcome to Dubai Real Estate Unplugged. I'm Simon Baker, Manager Director at House and House, joined by associate directors Stephen Leckie and Paul Charland. Between the three of us, we've got around six decades of boots on the ground experience in this market. We've seen the highs, the corrections, and everything in between. So when things get electric like they have in the past month, you're in the right place. Let's get into the shifts we've seen and how best to navigate them on your portfolio of investments and long-term goals. Before we get into what's going to happen, even now and in the future, looking historically, obviously we've all been here for longer than we'd care to admit, really, but certainly all over 20 years. Looking really back, Paul, to the first, you know, setback, if you like, which was the global financial crisis at the end of 2008.

SPEAKER_01 0:48

Yeah.

SPEAKER_00 0:48

And that was certainly the market was very good for probably only about three years before that, wasn't it? So 26, 27, 28 were three real boom years in Dubai where prices saw a huge spike. Can you tell us a little bit about that period?

SPEAKER_01 1:03

Well, I mean, I came, I started work on September the 1st, 2005 at Dubai Luxury Homes. I know Stephen started July 2005 at Dubai Luxury Homes. We saw a three-year busy market. I mean, when I won't ever forget it. I I remember waking up, we lived in Arabian ranches. It's a Monday morning. I've gone downstairs, made a coffee, it was September the 15th, I put the news on, and the strap line on Sky News was Lehman Brothers goes bankrupt. And it was, ah, that's not very good. That if anyone doesn't understand what that means, that's like a Goldman Sachs going bankrupt. It does not happen. So we knew probably that we were going to have a problem. Within two weeks, we knew we were going to have a big problem. Within four weeks, we knew we were completely and utterly that. I don't think we could price anything for six months. It was what's the price of that? It's more a thousand dirhams a square foot, give or take, JBC 600, downtown 1500. Who who can name a price? The crash then and the after effects, I believe, um were much more severe than what we're experiencing now. And the actual whole thing that happened then sort of last, it was a down market for about three years. I can see this market, and this is just my opinion, just because the rest of the world is in trouble and it's going to be in more trouble after the end of this, I think people will pivot back to the UA the UAE quite quickly, um, a lot quicker than what they did previously, particularly the 2008 crash.

SPEAKER_02 2:28

There's an interesting thing that happened in 2008-2009, which is that, and this is where we didn't have any experience of such a thing. We'd only been in the market for three or four years. But looking back at it, it was a learning experience because the people that actually have uh emerged from that uh global crisis having made a lot of money and have done really well, like real estate agents, they're the ones that actually hadn't been used to the good times. They came to the market in 2008, 2009, and they did really well. I think you're one of those, Simon. Yeah?

SPEAKER_00 3:02

Yeah, possibly. I mean, I certainly I started in in probably the start of 2006, maybe. I came in middle of 2005 as well. But I started 2006. So I had a couple of good years, but again, I was really young and hadn't hadn't done property anywhere in the world, really, unlike you guys.

SPEAKER_02 3:15

So if you look at some of the the big real estate agents in Dubai right now, the ones that have been here a while, some of the things they actually arrived around 2008-2009.

SPEAKER_00 3:24

Certainly a lot of companies started at the end of 2008 and they've done quite well. Yeah, no, I think we mentioned the other day that if you'd only ever bought um the year after the year after you know some global event or some Dubai property event, you would have done very, very well.

SPEAKER_01 3:36

For example, 2009 or 2010 or 2009 was the best year to buy real estate in Dubai. I can remember, and I'll be honest about this, I had friends calling me saying I want to buy in Dubai in 2009, and I was telling them not to. No. Because I just thought Dubai was over. That's how bad the crash was for me.

SPEAKER_02 3:53

Yes. But from that experience, you have learned that when this happened in when COVID happened, when the conflict happened, the recent conflict has happened, that actually this might be a good opportunity. This is the time of opportunity for the future. Thank you. How do we know that? We know that because of our experience 2008-2009, and we know that those people that work hard as agents through that time have done incredibly well.

SPEAKER_00 4:20

As has investors who bought at that time. But looking at the drop there, I mean, our average, on average prices dropped around 70%. So it was a huge drop. And that's probably back in 2008. And that's probably a lot to do with the fact that it was a much smaller population, it was very different dynamic, wasn't it? I think most of the people that you were dealing with were buying and selling within a month or six weeks or maybe a week.

SPEAKER_02 4:40

Well, you were getting mortgages on off-plan property, weren't you, that hadn't even started.

SPEAKER_00 4:43

So there's some big issues with the time palm Gebal Ali, which has obviously recently been uh reinvigorated, but at the time people were paying 200% premiums, weren't they? Financing them, and then suddenly they were being uh taken back at the original price and different things like that.

SPEAKER_01 4:57

So I had I had I won't tell the whole story because I've sold it a few times, but just an example for anyone who does doesn't know anything about the crash of 2008. I had uh a guy who bought a uh Palm Jameer Garden home paid 2.5 million direct from uh Nikhil in 2001, I think. He could have sold it for 10 million deerhams in August 2008, and that was the price, and he could have sold it. He called me back in November 2008 and said, Paul, do you think you can get me back my two and a half million deerhams? That's how aggressive the crash was. Just to just give you an idea. Thank you. Very good.

SPEAKER_00 5:33

Yeah, no, we all remember that quite well. Yeah, obviously. I was crying. And then Dubai was very different. So demographic-wise, a lot of people were here for the short term, weren't they? Um there weren't as many families, it wasn't as a mature property market as it is today. The market had only been free-hold market had only been around for about five or six years. Um, and as such, you know, it people did leave, and people at that stage probably you know thought it wasn't coming back um near, you know, nearly as much as they as they as confident as they are today, basically.

SPEAKER_02 5:59

I think it wasn't just the investors, it wasn't really even really saying it was it was the whole infrastructure, the government, everything. Nobody really knew what to do. And the government at the time, you know, it was all about being the bigger, the better, the largest, the build it and they will come. Exactly. And and I don't think they were that focused on the what should we say, the substance of it all. It was all about just let's do it.

SPEAKER_01 6:24

I'll tell you what, there was one thing at that time, and I'll never forget this, because I was very like I I thought it was the end of the UAE, and I really did. And I remember driving round and nearly everything had stopped, all the building work. The one thing that hadn't stopped, and I remember thinking, why are you doing this? was they didn't stop building the roads and interchanges. And these roads and interchanges were going to like to me, they were going to nowhere. Like, why are you doing that? Like, that's a road to the desert. They obviously knew that at some stage the UAE Dubai was going to come back. It might take two years, three years, four years. So they put all this infrastructure so when it did come back, they was in a great position for getting around Dubai.

SPEAKER_02 7:04

Which is interesting, that's almost what they're doing at the moment, isn't it? Yeah, yeah.

SPEAKER_01 7:08

I went out the weekend a lot, and I drove around a lot at the weekend because it was quiet, Sunday morning. Honestly, I was I was in Dira, Dubai Islands, I was all over the place. The amount of new roads everywhere is phenomenal. It is unbelievable. Everywhere, literally every part of Dubai a new road.

SPEAKER_00 7:24

Great. I think, listen, as a leadership government, they've learned a lot from the last 18 or 20 years, and they know now that you know they're on track, still on track to be, you know, this population target for 2040, economic agenda for 2033, and I think they're very firmly still aligned with that. So this is a setback. Um is it a short-term setback? We just mentioned it's very hard to predict, isn't it?

SPEAKER_01 7:46

It's a small setback for the OE, the UAE, I believe, compared to the rest of the world. They will be impacted a lot more by this economic situation with oil and prices and inflation. I think it's going to be pretty bad around the world. Which is great for us. But anyway.

SPEAKER_02 8:03

Yeah, we do tend to benefit from these things, don't we?

SPEAKER_01 8:05

Well, and we're an oil-producing uh uh country, which is which is quite handy as well. So we've got more money to spend on infrastructure and making it a nicer place for us to live in.

SPEAKER_00 8:13

And the way they've handled it in the last six weeks is pretty incredible, really. Um so and you know, I hate to say it, but statistically speaking, we probably still are one of the safest places on earth.

SPEAKER_02 8:23

Thank you.

SPEAKER_00 8:24

Despite the fact that people might not want to hear it like that.

SPEAKER_02 8:27

Obviously, very much quieter than we've been used to over the last three or four years. Um I think there have been some opportunities. It is definitely a case of rethinking the way that we are doing our business and the way that we are communicating with our clients. Um I think that's been the big change for us. Um, it is no longer uh a case of uh, shall we say, low-hanging fruit. It hasn't been, it's been we've had a very good four or five years possibly. Four years, certainly. Definitely five. Is it five? Five years, yeah. February twenty-one. Is it? Yeah. So okay.

SPEAKER_00 9:06

Yeah, so it has been five years. I don't think necessarily the market was booming in 2021, was it? But it was certainly picking up after that COVID picking up.

SPEAKER_01 9:13

Peninsula launched October the first, twenty twenty-one. That's when it really picked up for us.

SPEAKER_00 9:17

Yeah, so really twenty-two all the way through into twenty-five. Yeah, so there's some really solid.

SPEAKER_02 9:22

It almost came to a halt about six weeks ago. It did. For about a week, and then it started again. I would say there was this hiatus of a week when everybody just wasn't really sure what was going on and how long this was going to last. And then I think you started to see the opportunists in the market looking for deals, and there were people who had probably a lot more confidence in the market, they'd been around a lot longer, and they realized that this was even if it was a short to medium-term problem, it would recover and Dubai would bounce back. And we saw some great things happening from the government. Um, and I think yeah, sentiment just slowly changes, doesn't it? And I th I still don't think we're back on on um in the good times, but it's certainly getting better.

SPEAKER_00 10:12

Yeah, no, we have noticed it's picking up week on week, certainly levels of inquiries that we dropped about 50% in that first week, and certainly I think last week we were back to about 90% for leads from portals, which was I was actually quite shocked about. I didn't think within six weeks we'd come back that quickly. Paul Paul, has it noticed the same or to be honest?

SPEAKER_01 10:31

So the the the way I see it is that you know we did have five years of a very busy market, which wasn't actually natural. It should have been three or four years. So because the rest of the world kept making mistakes, whether that was elections, immigration, crime, tax, you know, it kept Dubai very, very popular. Now we we've been saying for a while we needed a slowdown, we needed a reset. You know, there's some developers launching too much stuff every week, it seems. There's sellers wanting ever higher prices, so we sort of needed this sort of adjustment. Now, this has been forced on us, and it's not great, but it was needed anyway. So I think when we do come out of it, and we can't put timelines on that, when it's going to be back to like a bull market again, but it's going to be a much better market with better brokers, more consolidated, with better developers launching sort of better projects. And I think we all forget as well, you know, the off-plan buyers, you know, every off-plan market has a run on it. You know, there's not this run of off-plyers that goes on forever. So to have five years of off-plan buyers was a long time. We've been saying for what literally, I think the three of us have been saying for six to twelve months, at some stage we're going to be doing a lot more off-plan resales. We are now going to be doing a lot more off-plan resales, which is more work for less money, but we've had some great times over the last five years, so we've got to work harder now. We're going to work harder. If we work harder now for what the business there is, when the good times come back, we're going to be in a brilliant position. That's my thought process. Yes. There is definite buyers out there. If anyone doesn't realise this, there are buyers out there, they want a good deal, and there are good deals out there. We don't think that's going to last for that long because once they sort this situation out, the distressed sellers or the people who need to sell might not need to sell so much and they might not need to sell for such a distressed price. So I think that isn't that far away.

SPEAKER_02 12:20

So when it comes to what's happening, we're already seeing it.

SPEAKER_00 12:23

Yeah. I mean, when it comes to prices, it does seem different communities are reacting and different individuals are obviously reacting in different ways, which is completely understandable. Different assets as well. But things have changed, you know. So yesterday we we closed quite a few transactions on, you know, yesterday, Monday, first day of the week, which typically happens, but it's certainly come back very strongly the last few weeks. Um, and there's been a few record transactions, which is probably quite hard to weird, isn't it? I mean, you probably you know, you say that and people probably won't believe you, but it's it's interesting the ineffective. Record prices on very expensive prices on you know, villas. There was one in one in JVT, there was another one in Victory Heights. I mean, at the same time, if we're completely honest, there are some areas where owners have had to adjust their price down if they wanted to secure a sale, certainly in the last month.

SPEAKER_01 13:07

Um but we know that nearly all of them bought at a much lower price, so they're just taking a little bit less profit. So we shouldn't feel too sorry for them.

SPEAKER_00 13:16

No, sure. I mean, okay, so people who've bought three or four years ago are probably still doubling their money on in some of these villa communities. Um, where the prices go from here, obviously in real estate transactions do tend to take two to three months to start showing up on you know whatever system you use. We use property monitors, land department data. But of course, the deals that are showing in March are transactions that were probably four and F's that were signed in in January or even February. Maybe even December. So possibly a good two or three months ago. So it will take a bit of time before we can start seeing real data on or you know, transactions in all these different communities, before we can really take a call on exactly what those price levels are. I think we're seeing somewhere between 10 and 15%, which seems quite quite a sensible reaction to what considering what's gone on.

SPEAKER_01 14:05

When you think about it, if you if you were looking for a property six months ago, you know, and it was, for instance, 10 million Durham's, and now if you're if you're taking a long-term view to raise your kids here, go to work here for 10, 15 years, if you're taking a long-term view, I'd just be very happy that I'm now paying 9 million rather than 10 million, because that's going to be my house for the next 10 years. You know, so I'd I'd this situation, not for everyone, but there's certainly for some people, they're seeing this as a great opportunity because they're they're seeing the reset and then they're now prepared to say, yes, that is a fair price for that property. Beforehand, they didn't think it was a fair price, they thought it was too expensive. I think that's going to be more aligned as each week goes by and more normality comes back to the market.

SPEAKER_00 14:48

So looking at rentals, rental rates have come down a bit. Um, I don't I don't really think that's a negative for long-term growth. I think that's why it did concern me in the last 12 months. Some of the rental prices you were seeing, and that's obviously driven by you know a lack of supply and huge demand from population growth, did feel did feel a bit high. You know, some of them felt like, are we are we becoming a leader city that's pricing pricing normal people out of the market?

SPEAKER_02 15:14

So when we talk about the market bouncing back, do we think the prices are going to start increasing again? No. What about an off-plan property? No. Really? Well, I don't want them to. No, I don't want them to either. But you don't think that the cost of building, the cost of construction, the cost of land is not going to increase.

SPEAKER_01 15:33

This is this is this is a slight concern where where you've got some developers with so many off-plan projects, we know that they're saying that now materials are 40 to 50% more, which they're going to be. Yes, because just the transport costs are 40-50% more. The worry is obviously if they've sold at a certain price and now they're going to build at a certain price, you know, that are they going to build that building if they're taking a loss on it? But these are things which haven't come into play yet. This is this is what we're going to see over the next few months. But it goes back to, you know, if if if I had a buy now and they said, Boy, I want a safe investment, EMA or Nikhil Maras. Just go with one of those. You know, some of the other developers, sorry. Why would that be? Just because they're government backed, they're very safe, they're cash rich, and I can't ever see anything going wrong or them not building anything they're saying they're going to.

SPEAKER_02 16:22

But so on the flip side of that, what you're saying is there's some of the smaller developers who have paid a lot of money for the land, they won't be able to build what they want to build for the same price. Not because the same costs are much higher. Yeah. So either they have to increase their prices or they have to, what do they call that, budget uh budget construct value engineer. Value engineer.

SPEAKER_00 16:44

Okay, but someone listening to all this, you know, in that last 20 seconds, they might be worried to think, well, you can't sell it for more money if you've already bought the property, right? The developers sold it at a certain rate, and they've had a margin at that rate. But if the construction cost and the material cost has gone up, what we're saying is potentially the quality of that unit, even if you know, it does get delivered, fine, but the quality of that unit might suffer because of the increased cost of materials, so they have to value engineer that and change some of the fishing.

SPEAKER_01 17:13

Unfortunately, yeah, those cupboards or those kitchen cupboards they were going to use, now the ones they're using for the same price as the ones before are thinner and lighter and more lightweight. We are going to see that. We have to accept that. You know, we've been in the market long enough to know that if they can cut corners and save money, some developers will, some developers won't. It's our job to know which developers won't, because they're the ones we're going to want to sell. I I I mean I couldn't agree with you more. Yeah. Strangely. But it is it's it's it's just, you know, it is a it is a concern. If you've got I'm we're not going to name any names, but we've got an idea who we're talking about. If you've got certain developers launching every week, or it seems every other week, right? They're selling at a certain price, they won't have factored in the extra cost of these materials yet. So once they start factoring them in, they either put the price up anyway, so nobody's gonna buy because it's too expensive, or they have to have a very big fundamental change in the one in their business model and what they're doing.

SPEAKER_02 18:08

Yeah. Some of those developers we would say they're probably overpriced at the beginning. Yes. So maybe they do have that margin. Hopefully so. Hopefully so, yeah. I'm not we're not mentioning mains, but there will be some of those developers that we've considered before the conflict, they were way overpriced for what they were delivering, quality-wise, etc. Yes. Now maybe they can still deliver the same quality at the same price, and maybe they'll make a bit less money, but the client will get what they paid for. Yes. Yes, yes. Good.

SPEAKER_00 18:37

We hope so. I mean, I think in the next three or four years you're going to really see, you know, the developers appear in the market if then if they're either doing good or bad, right? Either way, they're going to accentuate what they're doing somehow. I mean, with reputation matters a lot, doesn't it? And we're always looking at the developers that can hand over quality units on preferably on time, but the quality matters probably more than whether they're a few months delayed.

SPEAKER_01 19:02

I'd like to think we've got very, very good relationships with the best private developers and we've got very good relationships with the top government developers. So you'd like to think that we're, you know, we're always going to have a very good product to be able to offer our clients to our buyers. You know, because as we all know, some of these developers they're holding stock off. You know, if if we can make a phone call and we can get off of something which isn't even on the market. You know, that's a privileged position we're in, working for house in house than dealing with these guys. Agreed.

SPEAKER_00 19:32

Returns on price is not going up now. If prices don't go up and developers have to sell at, you know, whatever the new market becomes. Are we going to see less launches because there is no margin there potentially? I mean, obviously there's been about 420,000 units, I think the official number is currently under construction, which is a lot of supply coming. So which will be the next part of the conversation with, you know, how is that supply absorbed to the market over the next three or four years as it hands over? Hopefully there'd be a lot less launches now anyway.

SPEAKER_01 20:02

I think that's a given. So if this hadn't have happened, this situation over the last six weeks, there would have been, you know, there probably would have been another 10 launches by now, which haven't happened. So theoretically, you could argue we've got a lot of supply coming, we've actually got less coming than what we could have had.

SPEAKER_00 20:17

Yeah, I mean, arguably, if this situation hadn't happened, you would have had another year potentially, prices going up another 10, 15, 20%, which would have put you in a sort of bubble territory for when the supply kicks in, which is going to be really sort of towards probably second half of 27, but significantly 28, 29, and even probably 30, with a few delays.

SPEAKER_02 20:37

The three of us have been over the last year or so saying this can't last, this can't last. Yeah, the boom, the the trajectory. The bull market. Yeah, this can't last. So what we're seeing at the moment, we were already expecting some kind of correction. And it was mainly it was it wasn't across the board the correction. I've never said to anybody it's across the board, but certainly certain assets, certain types of properties would be affected, and it was the clicky cut of the one-bedroom studios where there's so many in one particular building, one particular community. I think that's definitely going to happen, and that's what we're gonna see happening. But I just wonder whether it's gonna be across the board this correction or this slowdown, etc. I think luxury property, we went to a very good launch yesterday, beautiful property on Island B in Dubai Islands. Um I mean that's a type of product I hope will still get built, the budgets are out there, the quality will be there. But I just wonder about some of these cheaper properties where we're gonna have a problem.

SPEAKER_00 21:35

Yeah, right. Supply in this certain segments of the market, we've looked at lots of sort of 70% of the market for the last few years has been studios and Wombred, for example. Yes. Um the more reasonably priced ones are probably going to see some level of oversupply there.

SPEAKER_01 21:50

Yeah. If we can deal with you know what we don't want to do, we don't want to deal with the average developers who are building average developments in average areas. So we're looking for places like Dubai. Islands, you know, beachfront, near to the sea, walk to the beach, or walk to DIFC, somewhere like Jameera Garden City, somewhere where you can see automatically that there's value in that area and all that's going on around it. I think if you stick to that, you know, uh if you're taking a medium to long-term view, you know, to me, anything commutable to DIFC, I would look at it.

SPEAKER_02 22:22

Paul, we've been doing that all the time. That's what we do. We always look at those type of properties. It's just that all those other guys, all the other agents, a lot of other agents are selling stuff that we wouldn't touch, yes? Yes. Those are the people that are going to suffer. I think we're we're we're used to really understanding what our client wants, understanding who the developer is. We look into what we sell. Yeah, exactly. And we we feel confident in what we sell. Yeah, and we know the reason, you know, how much rent you're gonna get out, what capital growth is gonna be, whether whether it's good value you're presenting, the payment plan works, etc. All these essential fundamentals we look at, whatever we offer people, I don't think that's changing. That won't change us going forward because that's what we're doing.

SPEAKER_00 23:03

I mean if anything becomes even more important if you're gonna navigate. I mean, real estate should always be a long-term investment, shouldn't it? So people should always be buying for three, four, five years plus. I think the worry is in the last few years, people more and more were looking at options they could buy, and oh, can I sell it next week or can I sell it in a few months? And usually that was quite unachievable, I think.

SPEAKER_02 23:23

Yeah, definitely.

SPEAKER_00 23:24

Um so in talking about demand today, is have we seeing a demand change in terms of like who your buyers are and why they're buying, or there's definitely the investors out there who are looking for like the amazing, amazing deals.

SPEAKER_01 23:36

I think that what's what's a good position now if you are a buyer and you've got a good agent, you know, you can really go into the developer for a better payment plan. You know, what could have been a 60-40 or a 50-50? Now they might do a 30-70. Some, I was even told this morning, would consider a 2080. You know, that makes a big difference to the investor just because of sheer cash flow. So apart from the price of the deals out there at the moment, you also have to factor in the payment plan as well, and the developer you're dealing with, and then any discount. That that is only going to last for a certain period of time. When these developers start selling normally again, they're not going to offer these payment plans. So you can argue no, there is a window of opportunity now. We don't know how long it is, it could be weeks, it could be months, but there is something there at the moment that we can go to clients with.

SPEAKER_02 24:23

Bearing in mind what we've spoken about in terms of costs and etc., and trusted agents, I would be concerned about a 2080 payment plan, quite frankly. I think developers need a lot more than that to build a building.

SPEAKER_00 24:34

Well, they definitely do, but the question is if you look at a European market, then 2080 is quite quite annoying. But they're borrowing a lot of money, aren't they? Well they are, but they're having to self-finance it, but then that becomes a question, doesn't it? Where should developers be using client funds to build their developments? And should they or should they be arranging the financing up front, which allows them to, you know.

SPEAKER_02 24:55

Well, that would be an amazing result of what's going on if that is thought happening. I don't see that happening.

SPEAKER_00 25:00

I think the only way that they would shift to that more of that model is but depending on supply in the future and depending on how the market reacts to that. Yeah. And you know, because it wasn't so long ago. We have sure everyone has sure memories. I mean, it was so you know, in COVID, for example, you know, EMA would do six-year post-handover payment plans, and I think it was 2575 and stuff like that, you know?

SPEAKER_02 25:19

2080 payment plans, we wouldn't be seeing the launches that we've seen recently. No, no.

SPEAKER_00 25:26

Because some of these developers don't actually have the funds, and they probably can't raise raise the debt against it to fund it, can they? Yeah. However, the biggest developers, in a way, maybe would benefit from that. Okay, they would be having some financing costs for the construction, but we maybe they would benefit from that because it would be a big market cleanup, but that's a sort of whole nother topic, really.

SPEAKER_01 25:46

I was gonna say, I was gonna use one example because it it's just so people can understand sort of the pricing. Now, as far as I'm aware, correct me if I'm wrong, the the last launches, but let's use Dubai Hills as the example, it's the number one master community. The last launches were around 2,500 to 2,800 durings per square foot. We're now seeing units, those units and units previously launched at 2,2, 2, 3, they're trading around 1,900, 2,000. You can buy, particularly one beds, you can buy one beds now for below 2,000 derhams per square foot, which would have launched at 2,500. So to some people, that's a great, you know, that's an amazing deal. But that's that's give that's to give people an idea. That's that was a very quick 20% off of the launch price, literally within two to three weeks. Do you think that's going to continue? No. Okay, it's just at the moment. I think that that stock, as soon as things improve a little bit more, the investors are going to be s sweeping up all of these. This isn't this isn't the developers selling at these prices. This is the people reselling. Yeah, this is people reselling who that I know I I spoke to a client about it yesterday and he was saying, Paul, you know, this isn't ready for three years. I could carry on making these payments, and in three years' time, that problems could be less than what I paid for it, so why don't I walk away now? You know, that's just that sort of conversation. But to me, you know, if if I like Duby Hills and I was looking at 2,500 six months ago, now I can buy for 1900, happy days. Great. I'm taking a long-term view on that.

SPEAKER_02 27:10

Yeah, but that's a very temporary market. There aren't that many people selling at that price.

SPEAKER_01 27:14

No, but you would you could buy somewhere to you could I know you could buy somewhere today for that price.

SPEAKER_02 27:19

Now the fact that you've said that on this podcast is a couple of weeks later they'll all be gone. That's very true, it could be. What's the date today?

SPEAKER_00 27:25

That's possible, yeah. No, well it's possible that 21st of April. I'm sure, you know, as m as as things continue to settle down, the number of distress sales will dry up. Yeah. The question then ends up is well, what what price is the market what price does the market find? And you know, what when when you know when we have a market rate from three or six months worth of data, that's when you're gonna see what what that long-term value is gonna start you know growing again from. If if I don't think the prices are gonna drop up.

SPEAKER_01 27:53

You know a few details about that, don't you? Because that sold out, didn't it? No, still some units left. 80% sold out?

SPEAKER_02 27:59

Probably, yeah. And what sort of pricing was it? You could buy a two-bedroom there for about 1.5, 1.6. You could buy a two-bedroom with a golf view, golf course view at two million.

SPEAKER_01 28:09

So basically, you could buy an EMAR two bed for 1.5, 1.6. We don't think we'll see those prices again within a few months ever. So that's that's an idea, and that 80% sold out, and that actually sold out when there were still missiles and bombs coming over. So uh there's definitely buyers out there.

SPEAKER_00 28:26

Yes. Good. And where are they coming from, these buyers, Stephen? Where are the people you see?

SPEAKER_02 28:29

Interestingly, everybody said to me, Oh, we're only gonna be able to deal with the local market because they're the only people that understand the region and they're the only people that uh that uh will consider this as we know it's gonna bounce back. Um personally, um I I'm not gonna tell you how many deals I've done in the last few weeks, but sixty percent of them are from overseas buys.

SPEAKER_00 28:51

Okay, good. And a range of nationalities, anyway.

SPEAKER_02 28:54

Particular Australia, Brits, uh Belgian and um uh people living in the Emirates and uh GCC.

SPEAKER_00 29:07

Good. Very interesting. So yeah, and then we want to talk about opportunity, you know. So opportunity, I think we've probably touched on that a bit, but opportunity for the future. You know, you've mentioned some communities, but is there anything else that stands out to you, Stephen, or about locations or what you know, segment of the market?

SPEAKER_02 29:26

Would you be looking at townhouses, villas, apartments, or I I it's uh go back to again my the way that I work is I understand what the client wants, what their budget is, what their payment plan is, and then I will recommend the best possible properties that fit with their with their strategy. That could be a studio, it could be a one-bedroom, it could be a two-bedroom, three-bedroom, or a townhouse or a villa. It really depends. You you have to look at the whole market. Uh you know, I think there are definite growth areas that are interesting, especially the ones around the south of Dubai, Dubai Islands, um DISC, the growth there, etc. Look at the growth places. I think those are very interesting. Yeah. Um villa and townhouse communities throughout Dubai, I think, are uh in general terms are very good news. There are some which I wouldn't touch with a barge bowl, but most of them, most of them are good.

SPEAKER_00 30:20

Which would be the good ones that you would have to name a community.

SPEAKER_02 30:22

But we're not going to be able to do that. I think anything community. Government master developers have done, are doing great jobs. Uh I think some of the private developers are probably either biting a bit more than they can chew. I think they're going to struggle with costs, rising costs, and with the whole infrastructure that they have to do because they haven't got the experience to do that. That's a concern. Um and I think that the more established developers who are building communities, and every community I see, is gets better than the last one in terms of amenities, design, the amount of space between the houses, etc. Um, I think that yeah, I mean look, I I don't think one should just say old townhouses and villas are the are the best things to buy. They are a there's a good market for them. And I think that we're seeing it right now where i if you look at it from a helicopter view, townhouses and villas seem to be less affected by what's going on than town than than apartments, but actually some apartments are not affected at all. Some are more affected, so it's it's across the board, but you know, you you can't speak in general terms really. It's specifics, like we always look at specifics in each different area. Would you agree with that, Paul?

SPEAKER_01 31:40

Yeah, I just think for the time being, if to to reassure your investor, if you have got a serious buyer, you look at the solid areas, um, you know, uh apartments. We know there's a lot of apartments in Dubai. We wouldn't touch the apartments in the average areas, but the beachfront apartments or a walk to the beach or uh a drive to the financial centre, uh that's always interesting for us. And as we know, I know we use this stat a lot, but for anyone who has forgotten, 87% of all the units in Dubai off-planned and completed are apartments, 5% is standalone villas, and 8% is townhouses. So you can argue you just buy townhouses or villas, which obviously isn't in everyone's budget and their aggressive payment plans, but there is a massive shortage of them. But no, anything near to DIFC, anything near to the sea, I'm uh I'm I'm fully on board with that. What about the South? I I really like Dubai South. To me, Dubai is going south. Um, you've got Expo there. I'm a great believer in Expo. Uh you've got Palm Jebal Ali, which I think we can all we all know now that it's going to take some time, but it will be absolutely amazing once it's done. So, you know, anything in that area with a good developer, I'd also look at that definitely. As an up-and-coming area, I would Dubai South is up and coming, but it's got this rich history of Palm Jebel Ali. So it's it's almost you know, you're going to it is we call it an up-and-coming.

SPEAKER_02 32:58

There's a lot of people living and working in that area already. Yeah.

unknown 33:01

Yeah.

SPEAKER_02 33:01

And there will be more in the coming year, especially with Expo City starting to open up.

SPEAKER_00 33:06

Yeah, and the growth of obviously Abu Dhabi, but then even from you know, technically in Abu Dhabi, Aura, for example, who sold quite well at the end of last year. Um, I believe Neguib uh has bought another plot next door now, which is now that's quite quite a positive sign, isn't it? You just talk about Gantsu and just to explore it without expensive. Yeah, you know, to extend Bain even further. So it's uh very positive news. Incredible. Have you guys got any other thoughts you want to do?

SPEAKER_01 33:33

I think we just we just have to everyone's got to ride this out. Um we've got to work harder uh for for a bit less for the time being. There is opportunity, we're not going anywhere. Um we're great believers in the UAE. Um I think the last six weeks have proven what a great place this is, and I can't see any of us going anywhere for the foreseeable future. Stephen.

SPEAKER_02 33:56

Well, I won't get over this conversation, the fact that you went downstairs in 2008 and made yourself a coffee. That's true.

SPEAKER_01 34:05

I didn't tell you what was in the coffee.

SPEAKER_00 34:08

Very good. Well, thank you again, gentlemen. It's been uh in insightful and entertaining as always. Uh, we hope that our conversation has brought you some clarity around your decisions and the options available to you. If you'd like tailored advice around your strategy and maneuvering your assets, we'd be very happy to support. Please get in touch with us today. Thank you very much. Thank you.