# Part 2 of Training Dubai Real Estate Agents | History of Dubai Real Estate average sales prices

**Channel:** Hamed Ghelichkhani
**Source:** https://www.youtube.com/watch?v=jcmTrUjo7mQ
**Transcript page:** https://www.withtranscript.ai/video/jcmTrUjo7mQ

## Chapters

- 0:01 — Dubai Market Boom Before Crisis
- 2:14 — Global Financial Crisis Hits Dubai
- 4:34 — Regional Turmoil and Expo Demand
- 8:37 — Oil Prices, Taxes, and Market Pressure
- 11:15 — COVID Shock and Market Recovery
- 16:05 — Closing Farewell

## Transcript

**[0:01]:** all right this is uh dubai residential price index the graph you see here is the chart of average prices per square foot

**[0:23]:** 2007 2008 so we reached to the high those were the crazy days 2007 2008 was the time you buy a property in the launch in the morning the price is different with the noon and noon price is different with the afternoon because when the proper when when a developer starts releasing units in a launch nine o'clock they release let's say a batch of hundred units at a price then once when they reach to almost finishing that batch before releasing the next batch they increase the price by three percent or five percent and then by 12 o'clock they release the next batch again so they used to increase the prices right so when your token is cold around two o'clock in the afternoon your price is already higher than the by 20 higher than the price of a person sometimes yeah 15 20 higher than the price of another gentleman who was in the same queue

**[1:22]:** with you from tuesday until saturday to buy that property so it made sense for many of those guys to buy in the secondary market from these guys who bought in the early times between nine to ten or nine to eleven with a five percent or ten percent premium so what happens to this guy who voted at nine o'clock ten o'clock in the morning is that let's say he paid a check he gave a check of five percent okay which is going to go to the accounts the day after and hit the bank the day after tomorrow right but today he is getting five percent premium food let's say you have given a check of two hundred thousand dirhams today you get four hundred thousand dirhams and after two days two hundred thousand will be deducted from your account that is why people were waiting in the queue from tuesday from wednesday until 2008.

**[2:14]:** so in july 2008 financial crisis came to the usa people were talking about financial crisis it's coming to dubai and nobody was expecting this to come to come to dubai because prices were increasing day by day so but i tell you my personal observation my personal experience what we saw in 2008 and summer 2008 was that the properties that we used to sell like this were not getting buyers they were not easy to sell anymore like the villas in the springs villas in meadows or apartments in the six towers in dubai marina our apartments in bulge residences which were always very easy to sell at high prices and the closing prices were always higher than the asking prices which is the case these days in villas no closing prices are higher than the initial asking price they were not easy to sell so this is what we felt and everyone was saying okay this is

**[3:13]:** summer then after summer we will have the city escape after summer we had ramadan after ramadan we have city escape after city escape during city escape everything will be good everything will be back to normal but during city escape everyone saw that again there were no buyers and there were a lot of supply in the market we were facing a huge oversupply that is how khalid prices started to drop so fast that in many areas many properties lost sixty seven percent seven to seventy percent of their value palm jumeirah garden home from 25 million rich to how much 5 million so in many areas many properties lost 70 percent of their value

**[4:08]:** i remember i bought a one bedroom in tanaro in the greens for 1.7 million and i was happy that they managed to get it and next year it was sold for 850 000 just in a matter of six seven months uh so this was due to the global financial crisis or recession then later in 2012-13

**[4:34]:** we faced the world-faced arabian spring revolution in many arabic countries tunisia lebanon crisis in syria sorry libya not lebanon lebanon has been there for the past 60 years it's 30 years at least now in tunisia we had crisis in libya in syria in arab so all the investors in these countries they wanted to take their money to somewhere safe because politically and socially their country was not safe and money wants to be in somewhere safe so the best place for all these guys was to buy why safe secure close to home halal food masjid everywhere mosque everywhere similar culture similar language high standards of living everything is new everything is luxury so that was the best place that was the best destination for all these arabic countries to move their investments to okay so their real estate in dubai started getting more attention because of the crisis in these countries by the same time a

**[5:47]:** booster was added to this process and the booster was expo announcing expo it was announced that expo 2020 which is a six month show or exhibition is coming to dubai and the previous one was in

**[6:10]:** so after the announcement of expo of course everyone government media they did a lot of exposure about it many investors came many buyers came prices started to go up and up and up until when as they speak september 14th okay end of 2014. by the end of 2014 there have been so many investors and developers private developers and government developers that launched so many projects especially apartments that the market faced was oversupply especially in the apartment section right the market faced oversupply especially in the apartments because among these investors who came to invest we came to buy many of them both lands and launched buildings and the government developers did the same private developers did the same they launched so many buildings look at the projects that were launched before 2015 and they were all scheduled to be completed before the expo because that's what everyone was planning everyone was saying okay i buy an apartment before expo i get

**[7:34]:** a lot of attention i get a lot of buyers and i will i will sell my property before the expo before 25 million 30 million people come to visit the country the plan looks okay but the problem is everyone had the same plan right so look at the projects that were launched before 2015. towers with 400 units 300 units two towers with 800 units 1 000 units huge master developments the white creek harbor dubai hills estate many new projects in downtown many new projects in arjun many new projects in jvc dubai land a lot of projects were launched so here we face the over supply and because of the oversupply prices started going down down down down down so you said the major reason was oversupply was the major oversupply was the major reason sometimes reduction see

**[8:37]:** one concern about real estate has always been price of oil so if you look at the history of these prices always increase in the price of oil increases the price of properties in dubai because of two reasons number one when the oil price increases your cost of construction increases right oil price increases the cost of construction secondly when the oil price increases it means a country that has the six reserves and resources of the oil in the world will make more money so when your government when your country makes more money it means you will do better in economy you will do more business and people will make more money so that's why your market will get more attention and the prices will go up it's always about demand and supply right however as i said only five percent of the economy as of this country is depending on oil right now what 95 percent

**[9:34]:** is tourism trade businesses and other stuff but still price of oil still has a little bit of psychological or mentally mental impact on the market okay mental impact so so for five years from 2015 till 2020 prices were going down and of course in 19 till 2019. let's look at the end of 2014 september 2014 till beginning of 2019. prices were going down majorly because of oversupply announcement of v80 helped the prices to go down further again it was another because people were not used to paying any form of taxes in dubai now that they want to pay five percent it affected many businesses actually in the beginning there is the challenge right but in long run it definitely helps the country because in long run when you have v80 when you have corporate tax means the government thank you the government will get additional revenue which will be used for the further development of the country so at the end everybody will make more money you are paying five percent v80 but in long run you

**[10:57]:** will make more money also so in the beginning it has a it had a lot of impact especially in businesses like gold and diamond precious stones and these businesses a lot of traders covet king

**[11:15]:** a very unfortunate incident many people lost lives unfortunately but i would say it was the best incident for dubai real estate market and i was saying this since the beginning

**[11:46]:** why do you think i'm saying that covet was the best event for dubai real estate market you know now we see there are many reasons to but by the time that it started by the time it started i think i have videos on instagram also yeah by the same time also in the mid 2019 right after the lockdown i was saying that kovit was the best incident for dubai real estate market my reason at that time was number one the prices were go down anyways thanks to kovet we had someone to blame honestly number one secondly prices will go down anyways and nobody knew till where till when are the prices declining thanks to kovitt they went down faster and they reached to the bottom faster earlier so by the end of 2019 beginning of 20 where are we now 2022 2021 by the end of 22 by the end of in september september october

**[12:56]:** 22 we reached to a point where the selling price of properties was actually less than the cost of construction am i right you are buying properties offices in jlt for two in in in mazaya business avenue there were offices sold for 250 different per square foot 250 dirhams per square foot garden home villas in palm jumeirah went to 6 million less than 6 million district 1 4 bedroom went down to 6.8 million do they find one left for less than 13 million i sold the five bedroom in this restaurant for 7.5 million market price was nine but the guy had no buyers so i sold the five bedroom for 7.5 million now nothing less than 16 17 million so the prices went below the cost of construction so they reached the bottom faster cidra villas in dubai hills went down to 2.6 million today there is nothing for less than four point three four point

**[14:02]:** four maple in dubai hills reached two and that time they were brand new they reached to 1.6 and i heard there was a deal at 1.55 i don't know 1.6 million in in maple for a three bedroom with 2 200 square feet built up area do they find one for less than 2.5 2.6 million there is nothing in a matter of one year right so the prices here by the end of 2020 which was i think the dip is in october or november if i'm not mistaken 2020 prices reached to the bottom because of kovit we had someone to blame prices reached to the dip faster they reached below the cost of construction besides in this country kovit helped us to show to the world what dubai is capable of because nobody no other country managed and handled covet the way the white government did the way uae government did sanitizing everywhere sanitizing the roads the lockdown was two or three weeks everyone got vaccinated while while in other countries they were

**[15:24]:** still talking about which vaccine to choose right so everyone got vaccinated we were one of the first countries to vaccinate the majority of of the population things went back to normal restaurants public areas public facilities went back to full capacity and came to normal so this challenge was actually converted to a good opportunity right so it became a very good opportunity to let the world know how safe and sound dubai is it's enough for today see

**[16:05]:** you tomorrow salaam alaikum