Classic example of bad investing. Here is what I posted to a few people who asked me about U.A.E. Real Estate and investment.
U.A.E. Real Estate
I have been asked by a few of you what do I think about buying Real Estate in the UAE. My answer has been negative. Then I am usually told how investment in property is good because unlike stocks, bonds, etc.. it is not speculative and the asset is real. Not true, everything is speculative till you understand value. In 2006 when the population was nearly half value was good. 2007 was even better. Since 2013 population growth has been flat yet projects launched have exceeded 2006, coupled with projections showing population contraction. Now ask yourself, is this good value? Of course not. Remember investment is about finding someone who is willing to pay more than what you did. With over supply and a flat to falling population you will be hard pressed to find someone to buy your investment for a higher price than what you paid. Especially with brand new homes coming on the market. I won’t even bring VAT into the picture, as it is projected to remove 12 Billion AED worth of wages out of the UAE in the firast year alone. As i stated in my earlier post.
Yet you have ridiculous articles in major newspapers claiming a bottom is near. Which is not very good investment advise in my view. Which is why no one ever gets rich listening to these media outlets. Hence further proof I am probably right and prices will fall. 😉
Problem with my response is that those who own real estate don’t want to hear negative news about their investment. As such I will be hated! YET AGAIN! As if Schiffbots weren’t enough! 🙁 SIGH!!!!
Author Jim Boukis
