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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (5011)	3/25/2006 11:17:08 AM
From: elmatador	Respond to of 218621

Understanding the Dubai real estate boom (3 years ago article) The New Dubai is adding 85,000 housing units to the emirate, and the Dubai hospitality sector is moving from 15,000 to 75,000 bedrooms. Can this fantastic oversupply of real estate be absorbed? United Arab Emirates: Sunday, October 19 - 2003 at 16:07 Elaine Jones of Asteco property produced the astounding figure that some 85,000 housing units are either planned or under construction in the New Dubai. Meanwhile, Prince Alwaleed's Hotel Investment Group's CEO Sarmad Zok said that Dubai was set to expand its hotel room count from 15,000 to 75,000. Can this new capacity be absorbed? Mr. Zok had a clear answer, 'Yes, the Dubai market has a dynamic of its own. The way the Government is creating new knowledge-based cities is creating the demand for this supply. 'In the hospitality sector Dubai has been in the same phase of the business cycle - the growth phase - for the past 10 years, and I do not see that changing'. Ms. Jones was also very optimistic about the outlook, and noted a shortage of property that was actually built at the moment. She highlighted the successful sell-out of the Hattan villas next to the Emirates Golf Course, and the recent payment of a $136,000 premium on a re-sale. So is Dubai real estate feeding off a special 'dynamic' that will allow what one speaker called a 'fantastic oversupply' of property to be speedily absorbed by the local market? It is certainly possible that the expected rise in population will take up the new property. There is another reason to be optimistic, which has to do with the supply of money. At present the Dubai mortgage market is in its infancy, although this is set to change. HSBC, for example, has just entered the mortgage market for Nakheel property with an interest of 5%, compared with 6.5% on offer from Amlak, the mortgage finance arm of Emaar Properties. Cheaper mortgages make homes more affordable, although the net effect is usually to increase property prices to compensate. Now if property prices start to rise then more people will want to buy because they will be afraid of missing the chance to buy at lower prices, and the people who bought will feel very happy and go out and buy more property. This is called an upward spiral. As Dubai property is already very reasonably priced by any international standard, and offers a rental yield of 8-9%, the entry level today may well prove to have been the low point in the property cycle. The important point here is that the Dubai property market is going through a systemic transformation with the liberalization of the market and sale to foreigners. Provided that rapid population expansion continues - and the city has seen its population grow by 24% in the past four years and was the fastest growing city in the world along with Las Vegas and Dublin in the 1990s - then the 'fantastic oversupply' of property can be absorbed. Indeed, with a greater supply of mortgage finance it would be logical for property prices to rise and rental yields to fall to more normal international levels. That would be another way for the market to calm down and mature into a highly efficient, liquid real estate market that would enrich residents and become another great business asset for Dubai. Thus contrary to some expectations the New Dubai property market may prove surprisingly resilient and deliver capital returns to investors more quickly than even the most optimistic might imagine.

To: TobagoJack who wrote (5011)	3/25/2006 3:27:20 PM
From: Muthusamy SELVARAJU	Read Replies (1) \| Respond to of 218621

TJ, After reading your most recent posts, I wondered if it is indeed timely to pause for a moment, and imagining oneself to have just 'landed' on earth, but already in midlife, and being totally ignorant of all the goings on, both past and current on this planet, seek you out for counsel on the following questions: a) where on earth do you recommend that I stay for the next 30 years of my life; b) should I rent or buy my place of abode; c) if I had say, USD 1m in electronic cash for 'investment purposes' (i.e. I need not touch any returns from this investment for another 3 years) that I could deploy instantaneously (i.e. by cob Monday), which assets should I deploy it to, for e.g. in: - commodities (which ones), and should I take physical delivery or are ETFs good enough, and if former, which country/ies should I store them at; - commodity stocks and related instruments (which specific ones); - currency investments (by type); - energy related investments; and - any other investments. For each of the above categories, what mix should I have of the above. d) if I had another say, USD 1m in 'income funds' which I need to invest to generate enough income in order to live, i.e. to fund ongoing living expenses (since I don't derive any employment income), which instruments should I invest in, and in what currencies; e) should I be 0 debted, or should I borrow in some currencies and leverage the above available funds. If so, which currency mix should I be long and short in; f) Last but not least, what kinds of lifestyle choices would you suggest to me, for example in terms of where to live, what music I should listen to, books to read, kind of company I should keep, places in the world I should rush to visit over next 3 years, etc. etc. Over the years, imho, you have pointed your readers (including me) in the right direction at critical points, and this seems to be one of those times when I feel your 'fresh' thoughts on above questions could turn out to be most useful for everyone. Your response would certainly make interesting reading, and elicit further passionate discussion on this thread, I am sure :) Thank You! All the best, Selva