Investing in International City

[dave3076]

There are a lot of people on this site that broke the rules of investment and are now sour, and scaremongering others. If you invested in int city for a minimum of 7 to 10 years, instead of trying to earn a quick buck, you`de be delighted, and int city still remains a good investment given the current evidence versus dubai`s fundementals. You`de see past sloppy paint jobs and porky pies and delays. If you were jonny come lately and invested to flip it, which has no real place in an investment portfolio other than the very high risk category, you`de be moaning....like the guy at the roulette table who wants his money back. All the problems mentioned are inherent to buying from a developer or agent. Lies, misleadings, not meeting target dates, failures, mishaps. Humans are the same, all that changes is the name.... its only a rare breed where money is involved that genuinely looks out for others. Dont put yourself in a position where you have to rely on the developer to make money. How? by taking a longer term view and ascertaining the nuts and bolts of the investment. So what are the nuts and bolts...if you only had a shell with attrocious workmanship how much is this property intrinsically worth. And your answer with int city is near to what you paid for it, thereby leaving limited downside risk with unlimited upside potential. People should know this before a penny changes hands. And yes ive got a one bed in persia so im in the same boat as everyone else, but because my view is over 10 years, i am very very confident that int city will be an excellent investment and if it isnt, well im a big boy and i`ll take the loss on the chin. However it wouldnt matter because i wouldnt put myself in a position where the loss would hurt my overall investment plan!. Anyone looking for a quick buck out of any investment, particularly property has to know that risk is joined to the hip with reward. And buying off plan to flip is fundamentally floored as an investment approach. Ask warren buffett if he`de buy a business that "should" be profitable in 2 years time....that "should" run as it was supposed to.....that "could" be a good investment. Then provide him with a glass of water to help him recover from his hysterical laughter. If anyone can tell me why int city wont be an outstanding investment 7 to 10 years from now, based on the current evidence, progress and future plans, i`ll take great delight in hearing it.... nakheel as far as im concerned are as **** as any other developer. Hence i accounted for that fact and still done my maths AND int city still came out looking trumps!

[jwayne592]

I have to say that reading the above comment has made my day. I am in total agreement that I C should be seen as a LONG TERM investment and that people cannot expect to double or triple their money overnight. It does annoy me reading negative comments from people who slate this venture and constantly tell those of us who have invested how rubbish I C is and that we are destined for financial loss and ruin. I really do not care for their opinions and would rather that quit trying to undermind the entire venture. If I C does turn out to be the laughing stock of Dubai and gets labelled International Slum etc etc then So be it! Could those that have never even invested quit telling the rest of us what fools we are. It has no concern to them and all they appear to be doing is scaremongering and putting people off the investment. At the end of the day most people have only invested around £38-£45000 not £1000000 which is what some developments cost. I say to everybody stick with this investment, have faith and ignore all those idiots that keep slating this development!!!

[DianeLouise]

Hi Dave,

I think you will find a lot of the 'moaners' are first time property investers who believed the hype. It is extremely rare to 'double your money' from any develpment anywhere in the world by buying off plan and selling at completion. Property always has been and always will be long term. Those from UK, seem to have forgotton that they could not have bought an apartment at this price in UK. And they would not be able to see any cash flow from renting it. A UK property costing £120,000 would only rent for around £6000 per year, which is lot less rent than IC for more than twice the price. As for the delays etc, again the inexperienced moaning. Just remind them of Wembly Stadium. I have never had any development handed over on time. As for the extra costs, I must say that this has been the only real dissappointment for me so far, they should have been upfront about these and not tagged on after all the payments were made, disgusting! As is the maintenance charge. In terms of investment though it is already proved good for me, as I am aready seeing profit (although very small) after paying ALL costs, using 100% borrowed money to purchase in IC. To put it another way I am making profit on money borrowed from the bank in year one. How can that be anything other than a good investment? This has never ever happened to me anywhere else, I have always had to rely on capital appreciation. Yes I know other developments are better, there always is, but I believe this will be great. All you beginners just hang on in and you will see!

[DianeLouise]

Hi again,

I forgot to say that I have found a couple of the 'moaners' are actually investors who are deliberately trying to de-value IC as they have not purchased yet. These guys do not normally buy until just before or just after handover, but this time not enough apartments became available. They are posting comments to scare vunerable owners than making offers to to purchase from them under a different identity. DO NOT sell your apartment on the cheap (or rent it out cheap), the demand IS there.

[dave3076]

What begginers, moaners and knockers really need to understand is how to value a property. How do you actually value a property???Well there are a few ways, but id suggest the best way in terms of an investors perogative, is to look at what both types of buyers in a market are prepared to pay for a property. Who are the players? The players are both investors and potential home owners. PROFESSIONAL investors generally invest for cash flow/yield. They understand that most property will rise over time, but they want it cash flow positive so they can continue expanding their portfolio, and look after the cash flow whilst the property rises look after themselves! Home owners buy to live there. So how can we ascertain a property`s value using these two groups as measures. Well, generally the shrewd investor will pay a price where the rent is at an annual yield of the gross price of the property ABOVE the interest rate they can earn in more common investments like bonds, stocks and depositing cash. So if we look at int city in this perspective, there is still much room for capital growth until the sale price makes it totally unattractive to an investor in terms of yield. All the disgruntled people who are concerned over yield seem to be those losing on exchange rates! Exchange rates go up and down. The gross yield on the majority of apartments in int city are above 10% in the base currency of UAE dirham! Which is very good for a new build! We can also gauge what a property is worth by actually taking a close look at the potential home owner. Potential home owners in general can borrow on average, 3 times their salaries with an initial commitment from their own funds, normally in the region of 10 to 30% of the house/apartment price. So if we look at the average earnings of people in dubai AND of the potential ex pats arriving in Dubai and multiply it by 3, we can also gauge when a property is overvalued, because the property simply becomes out of their price range. Int city is WELL below this watermark. Also the mortgage market in dubai is a) primitive BUT rapidly evolving and b) in regard to int city, only just emerging. When you have a situation that is attractive to BOTH these participants you are pretty darn close to a property hotspot..... investors will be bidding a price until the sale price to yield ratio becomes unattractive, and the homeowners will continue buying until it becomes unaffordable! When this situation occurs, who`s left to buy??? No one! The homeoner has to borrow more and more until they can borrow no more AND the investor isnt interested because the yield is poor. Cometh the fall!!!This is when you may want to think about selling! NOT when you discover the skirting board has been chipped or the paint is smudged or the smell of **** (which incidentally is being addressed and should be resolved by chrimbo this year) is bad, or the developer has behaved in a way that 99% of developers behave.

[stumbled]

Scaremongers, moaners, sour grapes, idiots etc etc... grow up, what are we trying to get to here??? facts or feel good factors?? cause if ones trying to feel good then prozac would be a solution, cheap insults and name calling won't get us anywhere here. Everyone has brains and can do their own thinking and none of us can convince anyone in life to do anything, let alone sell their investments.
All i have done in these posts is given facts, in return we expect facts from the investors who are hoping for their capital to appreciate.Give us so called ''moaners'' the facts why u think it is good or excellent, In time it may or it may not be good or bad , and the thing to remember is people always make fortunes on RISKS, which IC seems like, it isn't something solid but hey, u guys maybe sitting on gold dust eh

Now for some facts your cash can earn 6.3% yearly nett if you are based offshore, can your investment beat that?? So, at the moment cash is king, with rates going to rise even further and dollar depreciate even further.
http://www.alil.co.im/offshore-fixed...nd.aspx?bhcp=1
If you are on borrowed money then you are paying about 7-9% interest alone on your borrowings. Do you get that sort of return on your rentals to cover your mortgage??hence, DISTRESSED SALES. I must state here this scenario is not only with IC ITS WITH ALL PROPERTIES IN DUBAI and its a world wide effect,anything that goes up must come down, had too much of a good time,hence ,people who didn't sell earlier are scared it might burst on their face or just too greedy?.Proof no2.

expatriates.com - Dubai - Real Estate For Sale - Cresecent tower - DISTRESS SALE (``Tina``)
expatriates.com - Dubai - Real Estate For Sale - Studio at International City - 340,000 AED (all incl) (``Tina``)

My third url would be the chart where it shows people who committed and transfered money between 2-4 years ago have lost about 20-40%,due to the depreciation of the dollars against major currencies in this case Sterling, i won't even go into comparing it with the Yuan and the Rupee, which have gained massively recently against the greenback and hence against the Dirham directly.

British Pound to UAE Dirham Exchange Rate - Yahoo! Finance India
UAE Dirham to Indian Rupee Exchange Rate - Yahoo! Finance India

Lastly, i must add that i was looking to buy and invest on 2, 1 bed apartments in the IC CITY initially,but a lil bit of research has shown i'd rather sit on the fence. reason, well its evident , any property investment now in this climate is dangerous business, ESPECIALLY IN DUBAI!!!

[stumbled]

Originally Posted by DianeLouise

Hi again,

I forgot to say that I have found a couple of the 'moaners' are actually investors who are deliberately trying to de-value IC as they have not purchased yet. These guys do not normally buy until just before or just after handover, but this time not enough apartments became available. They are posting comments to scare vunerable owners than making offers to to purchase from them under a different identity. DO NOT sell your apartment on the cheap (or rent it out cheap), the demand IS there.

The funny thing is some people think this forum is the place where all properties are sold, bought and rented.
We all have a tool called the ''internet'' where all information is available at the tip of our fingers if i may use this cliche.

check out the link i have posted and see how many people are selling as distress sales. You can buy as many properties as you want all you have to do is spend MONEY. Trust me its a buyers market. No one is going to make a fortune buying 2-3 IC PROPERTIES, let be realistic, rather than resorting to name calling and cheap insults.

[dave3076]

Whos got a complex????
I actually thought you wrote some valid points in your other post i replied to, and i wasnt referring to you! However, you have neglected to read the above i feel. You are definately an exchange rate loser. You`re using the sale price to yield ratio and then exchanging it into pound sterling. In which case it isnt hugely attractive short term. You think english buyers drive prices in Dubai? Wake up! To professional investors in Dubai, int city is a solid investment. They`re getting 10%+ gross yields from NEW BUILDS, because they`re not subjected to currency exchanges.... Its likely they`ll continue to drive prices up until yield gets to a stage that you suggest i.e. more attractive to bank their cash. Or are you the only one who knows about yield....the arabs haven`t worked out yield yet? 10%+ isnt good for an investment buyer? 200,000 of you have been around in the UK since the uk boom started.....SELL NOW its looking shaky the falls are coming ladies and gents! shaky for 10 years and over 200% price increases in some areas. If a properties cash flow positive which it is for me, then i`ll stick to newtons law of gravity....a body or trend in motion tends to stay in motion. Keep trying to pick tops and bottoms will keep you on the sidelines during some of the most profitable trends.... The UK market being one of them. If uae investors are ALREADY earning 10%+ yields on int city, and bearing in mind rents are linked to inflation as opposed to the more volatile movements up and down of the property price, exactly how far down do you think people will let property prices go before they go in with pots of dough buying up everything in sight?.
How much room is there for first time buyers and potential home owners to keep bidding up prices at int city? And when they`re out the game, cometh the mugs buying at the top, which you are assuming we are even tho we bought 2 years ago. Thats your opinion. Mine is that you act on figures and facts that are irrelevant, and that ignore what really drives property prices. These figures have been bandied around by uk "experts" for absolute years. You ignore the fact that these properties are rental cash flow positive and that some of us know rents dont really budge like property prices, and that we`ve bought with a 10 year view and that we dont actually care about irrelevant sale price moves as long as we`re cash flow pos. We`ve bought! you were thinking about buying now, which is totally different! i cant speak for anyone else, but i was exchanging sterling into dirham at 6.7 and above all the way thru the stage payments. Im gettin 10% yield and you`re trying to convince me into sellin! Leave off mate!

[stumbled]

Originally Posted by dave3076

Whos got a complex????
I actually thought you wrote some valid points in your other post i replied to, and i wasnt referring to you! However, you have neglected to read the above i feel. You are definately an exchange rate loser. You`re using the sale price to yield ratio and then exchanging it into pound sterling. In which case it isnt hugely attractive short term. You think english buyers drive prices in Dubai? Wake up! To professional investors in Dubai, int city is a solid investment. They`re getting 10%+ gross yields from NEW BUILDS, because they`re not subjected to currency exchanges.... Its likely they`ll continue to drive prices up until yield gets to a stage that you suggest i.e. more attractive to bank their cash. Or are you the only one who knows about yield....the arabs haven`t worked out yield yet? 10%+ isnt good for an investment buyer? 200,000 of you have been around in the UK since the uk boom started.....SELL NOW its looking shaky the falls are coming ladies and gents! shaky for 10 years and over 200% price increases in some areas. If a properties cash flow positive which it is for me, then i`ll stick to newtons law of gravity....a body or trend in motion tends to stay in motion. Keep trying to pick tops and bottoms will keep you on the sidelines during some of the most profitable trends.... The UK market being one of them. If uae investors are ALREADY earning 10%+ yields on int city, and bearing in mind rents are linked to inflation as opposed to the more volatile movements up and down of the property price, exactly how far down do you think people will let property prices go before they go in with pots of dough buying up everything in sight?.
How much room is there for first time buyers and potential home owners to keep bidding up prices at int city? And when they`re out the game, cometh the mugs buying at the top, which you are assuming we are even tho we bought 2 years ago. Thats your opinion. Mine is that you act on figures and facts that are irrelevant, and that ignore what really drives property prices. These figures have been bandied around by uk "experts" for absolute years. You ignore the fact that these properties are rental cash flow positive and that some of us know rents dont really budge like property prices, and that we`ve bought with a 10 year view and that we dont actually care about irrelevant sale price moves as long as we`re cash flow pos. We`ve bought! you were thinking about buying now, which is totally different! i cant speak for anyone else, but i was exchanging sterling into dirham at 6.7 and above all the way thru the stage payments. Im gettin 10% yield and you`re trying to convince me into sellin! Leave off mate!

To be honest i haven't read any of your posts.., but this one i took a lil bit of my time , to be honest you are getting personal now, you don't even know my position in life and in investments. Like the share market there are bulls and bears,me being bearish here seems to have driven ur grey cells.
Listen, i said this before and i say this again lets not bring the UK property market into these forums.You are not an Arab either, they have special facilities, like better morgage offers and they don't go for small cheap investments like INTERNATIONAL CITY, they play big,let me point towards NAKHEEL(arab),who has played games with you,and thus, the frustrations.I get the feel we are straying from the topic.
Getting personal and childish reflects your nature, so lets leave it at that.
I have also mentioned i have been a professional landlord in london(uk) for 10 years, Dubai and property is only 5-6 years old, my friend. I have one saying for you, be HUMBLE OR YOU STUMBLE. If you have knowledge share it sensibly with others don't try to use it to score points, only immature souls resort to that, not gentlemen.
Remember, another thing this is just a forum, you won't score points here. Goodluck on your investments.

[dave3076]

I couldn`t care less if you were bull, bear or millionaire. Firstly, mortgage has a t in it. Secondly, and for the last time..... You are talking about looking at buying at international city now, or in the recent past. You looked at it, assesed it, and found the figures didnt stack up, which i wouldnt argue with. But you are imposing your analysis on those of us who bought TWO years ago. For us it is cash flow positive, as i assume your London portfolio is. So lets get this straight...... im cash flow pos, my property has done nothing but rise in value, it is still intrinsically cheap in comparison to the average dubai house price, and ive got a guy in London with a London portfolio telling me its time to leave because its near the top... i mean seriously that is whats known as hypocricy! Use your own analysis of Dubai on London. I dont disagree with your advice to warn investors NOW looking at int city, but dont impose your argument on those of us who are sitting pretty, when you`re in exactly the same boat with your london property yourself, if not worse. Im not trying to score points with anyone and my initial post wasnt directed at you in any way. It was aimed at all the negative comments in regard to int city, when most of the people who bought in the last few years are sitting pretty both in terms of yield AND capital gains. Bearing in mind i assume that this is the case for most people on this forum since it is a forum for international city investors and residents. If you suggest WE get rid of our investments when you are in exactly the same boat yourself, then forgive me if i choose to ignore you, and tell others in the same boat as me to ignore you. If you were directing your points to those THINKING about buying, then i dont disagree with you.