Property is gloomy, not booming

Property is gloomy, not booming

Dubai’s Damac Properties has announced that the property boom is back with a bang. We are speechless.

January 6, 2009 2:58 by Aarti Nagraj

A full page advertisement by property developer Al Barari recently hit papers, and read “What doom & gloom? Standing tall. Steaming ahead. Confident. Well positioned for the next boom!”

We wrote about this, explaining the “doom and gloom” which, thanks to the current financial crisis, does exist in Dubai.

So we were again surprised (and shocked), when we found a mail in our inbox from Dubai’s Damac Properties, announcing that “Property boom is back with a bang!” And why? Because the company claims it is offering waterfront offices in Business Bay at the launch price of 2007.

Property buyers in Dubai are rapidly turning into sellers even as they struggle to find an interested investor. More than 1,000 people have been laid off in the real-estate sector, developers have cancelled projects, and property prices have fallen drastically.

While property ads in the region have fallen – The National newspaper has just one property ad on Tuesday – a developer talking about a “property boom” or a “lack of gloom” in the current scenario does seem jarring.

Rather than trying to pull in new investors, a better idea for developers might be to provide good customer support to the existing ones.

Tags: boom, developers, doom and gloom, Dubai, Financial Crisis, projects, property, Real estate

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18 Comments

john on January 6, 2009 7:44 pm

Clearly these ppl are in la la land!!
Dubai Property on January 6, 2009 9:10 pm

Things are picking up soon.
Doug on January 7, 2009 7:27 am

That’s just property delevopers and real estate salepeople… With a straight face and with no remorse; they will say it is Sunny when it is Raining!
David on January 7, 2009 7:36 am

DAMAC has got its head in the sand and their butt in the air. Maaan! Are they nuts??
beautifulmind on January 7, 2009 7:56 am

Rather than releasing ads with absurd communication messages they should pay their redundant employees. Damac has not paid its laid off employees ciiting that they have recieved exemption from the labour ministry!! no one knows the truth, but whatever the reason they need to pay up fast and stop considering people as fools with such ads!!
DG on January 7, 2009 7:58 am

Typical immature responses from developers desperate to sell.
Emaar and Nakheel ready properties are the way to go. These are the most trustworthy of the developers.
Off plan is a hazardous path to tread especially with developers who pretend that they are still offering a good deal.
David on January 7, 2009 8:10 am

Just yesterday a few more of my friends working for DAMAC lost their jobs. What nonsense is DAMAC advertising in the papers? They are the biggest hypocrits.
Robert on January 7, 2009 8:17 am

Picking up soon? Are you having a giraffe????
J-Bag on January 7, 2009 8:26 am

My company, a recruiter with close ties to real estate and construction, have just hired 15 new staff.

Clearly, the senior management have been drinking the same stuff as the Damac lot.

Fools.
gaby on January 7, 2009 8:40 am

it is called wishfull thinking, but mind you, it works, especially here… tell people that all is well, that things are getting better and eventually that becomes real…
isn’t this what this crisis is partly about… sad and gloomy projections = sad and gloomy reality, why wouldn’t the opposite be true?
Obelix on January 7, 2009 8:48 am

Erm, they may want to sart by hiring back the people they have laid off to prepare for the rush that is expected soon with the booming (again) property sector in Dubai.
9vibes on January 11, 2009 9:43 am

DAMAC – Dumb And Morons At Company. How would you want me to react to “Property boom is back again” (#&@*ing idiots)
ranjan ghosh on January 13, 2009 11:20 am

DAMAC is the epitome of all that is wrong with the real estate market in Dubai. Gross malpractice, shocking treatment of employees (and former employees), nil management and spin and b*llsh*t to die for. It’s just a very big bubble waiting to burst.

In any developed economy DAMAC wouldn’t be trading. Where else could a company take billions of dollars of people’s money and give them nothing back in return. More importantly much of these billions were taken ‘before’ the Dubai government introduced regulations to make companies such as DAMAC put such money into escrow bank accounts to stop DAMAC using such money to prop up its ailing, failing business. WHERE IS THIS MONEY NOW? How safe is this money? The reality is that the money isn’t there anymore. It’s been spent to prop up the bubble now that all the investors money has dried up in the current recession.

The Pyrimid Scheme that DAMAC has been operating for the last several years is rapidly coming to an abrupt halt. Good news for future investors but very bad news for all those thousands of people who’ve given DAMAC the billions and received nothing back in return.

DAMAC has been trading for around 5 years. It’s taken billions of investors cash but so far only handed over THREE PROJECTS! A classic Pyrimid Scheme. Worse news still for these investors – DAMAC has recently CANCELLED construction over around 50% of it’s project in Dubai. Has it told the investors yet? Hell no. Then they’d be wanting all those billions back and DAMAC of course hasn’t got the money anymore.

As DAMAC isn’t willing to come clean with the poor investors there’s a list below of the projects in DUBAI that DAMAC has recently cancelled. If anyone doubts that these projects have been cancelled (DAMAC will of course deny this to the hilt) then a quick look around the sites in question will reveal the truth – nil activity.

DAMAC CANCELLED PROJECTS IN DUBAI

1. LOTUS 3
2. LOTUS 4
3. ADMIRAL BAY, Dubai Maritime City
4. BUSINESS CENTRAL, Business Bay
5. FAIRWAY HEIGHTS, Jumeirah Village
6. MEYDAN, Meydan
7. BAWADI, Bawadi
8. BURJSIDE TERRACE, Burj Dubai
9. THE CONCOURSE, Jumeirah Village
10. FLAMINGO COVE, Lagoons
11. NORTH BAY, Business Bay
12. CAPITAL SQUARE, Downtown Jebil Ali
13. BURJ VIEW, Burj Dubai
14. LAGOONS
15. AL MANAR, Sheikh Zayed Road
16. CENTRAL SQUARE, Downtown Jebil Ali
17. THE CONCOURSE 2, Jumerah Village
18. BAY’s EDGE, Business Bay

It’s time that Developers such as DAMAC treated investors far better and more honestly. Come clean DAMAC and tell these investors what you’ve done and where their money for the projects in question is?
BiZness on January 15, 2009 7:43 am

Seems like all addicts in denial, Dubai who is addicted to quick money and some crazy schemes is also suffering from the same. In perhaps any other country all the scandals would have quickly made it to the news and would have stayed there. In Dubai, it’s about how to get the bad news off the media quickly.

Why no media is covering the Dynasty Zarooni case is a total surprise? Below is a link from Forbes:

http://www.forbes.com/facesinthenews/2009/01/14/mulchandani-zarooni-dubai-markets-face-cx_ll_0113autofacescan01.html
Craig Dubai on January 18, 2009 10:13 am

Interesting comments especially from the list of Damac properties that were all supposed to be cancelled, no project has been cancelled, on hold yes but not cancelled.

Employees have been paid a good amount of money upon leaving, unlike the Emaars and Nakheels employees who received a ltter and they would not even put in the letter that it was redundancy!

All of the developers have made mistakes and the whole industry is going through a much needed correction, but please dont tell me Emaar and Nakeel are a better bet when there share price has fallen by over 80% and there have been behind the scenes talks going on with outside investment consultants as they have already cancelled huge projects completely and need to find money to finish off other famous projects such as the Burj tower, if i was a buyer i would be more worried about Emaar and Nakeel. One other fact in the last 5 weeks Damac deleivered complete three projects before time, two on JLT and one in IPMZ, also 5 other projects are being finished and are for delivery within the next 16 weeks and are on time!! so tell me where is the best bet now?

One other point look at the cases being lodeged against Dubai properties and the other developers people favour so much, and look closely at the contract, where is a right to cancel clause…Damac gives this…..it takse time but at least you have the option!

I agree there have been some crazy promotions by all developers, but it is a correction phase, the biggest culprits of the entire situation have been the banks who continue to bury their head in the sand and think by closing all doors this helps general recovery, which does not! and also the media who do not have the ability to report on positive points, but takes great delight in making all of us feel like crap, and even more nervous…and promoting panic……everyone wake up, you cant just aportion blame on the developers all the time! Remember the papers are also very selective about what they print, do you belive everything in the paper, remember they are in the business to sell papers!
Dino100 on January 18, 2009 1:29 pm

As an experienced investor, i have seen the ups & downs of both the UK economy and over the last few years the Dubai market.

I have bought property from both Damac & Nakheel. I bought in Intl City & also Discovery Gdns. It has to be said, i have wonderful tenants in Discovery Gdns, it let incredibly fast, the location is very handy to get around and the project was ready only 8 weeks late, which for Dubai is virtually warp speed!. Note Burj Dubai (Emaar) is already 15 months late!! On the other hand, my apartment in Intl City has been problem after problem, not to mention drainage, plumbing and electrics, the construction is straight out of a DIY book, and not even a good one!

I have read on here about the public’s view, which is warranted as i’d like to think that some element of freedon of speech exists, however i would be keen to know, of all the comments made on here, the actual percentage of people that have had direct contact with Damac and bought from them, i would also suspect that its the same old” jump on the bandwagon” routine fuelled by the curtain twitchers, and jumeirah janes of this world!

In any case, i felt compelled to write in, i am a firm beleiver in praising when warranted (not many do any more) and also complaining when needed. In my 1st hand experience, i have found Damac’s staff courteous and helpful and my property is let with no hitches, unlike the other!
Abu Dhabi Bob on January 23, 2009 4:31 pm

Craig, I take it you work for Damac in the PR Dept? I’m not sure about Damac paying ex-employees, I’ve read that the opposite is true.

http://zawya.com/story.cfm/sidZAWYA20081109034407/Damac's%20Downturn%3F
monty on January 30, 2009 12:30 am

just a bunch of expat air heads who have all been spanked by estate agents. now your lumberd with a overseas property in the middle of a dessert, full of debted up essex boys. good chance you will never sell
as overseas investors have all but gone and they aint coming back.. The biggest property bubble internationaly of ALL time is only months from bursting with one almighty bang and you guys are up the creek without a paddle. good luck. and i bet you all bank with RBS