Ajman in 2010 and beyond -
I wouldn't expect to see any sign of recovery in Ajman in 2010 or beyond - for the following reasons:
1) Ajman was marketed as a 'bedroom' community to Dubai, boasting a mere 25 minutes from Dubai Int'l airport. When the prices in Dubai skyrocketed, for many investors / buyers - Ajman became a viable alternative where you could own for 50% or less than in Dubai. (retail AED 300 to the peak last year of AED 450- 500)
Now that prices in Dubai have dropped 50% and may go down further - it's far less attractive
2) Another selling point that made Ajman attractive to many investors that intended to be end-users - was the Visa - that is out of the equation now. So, many of those buyers, who did in fact buy to establish residency - will no longer have much interest. (India, Pakistan, Iran, Russia...)
3) Ajman municipality has lost much credibility with investors and perceived lack of a 'rule of law.' A master developer defaulted on handing over the plots for several large projects - having not done the infrastructure work - because he used the proceeds to speculate on more land. The gov't canceled the project and then penalized the sub- developers 30% !!! Which was then passed on to the investors! Then offered other plots at inflated values above the current market! This action has been taken with total impunity. It begs the question, if the gov't can do this - what else can they do? Where is the protection for investors?
4) Although they established their own form of RERA - to date, it's not very effective and hardly what you consider as 'User Freindly'
5) Drive through Ajman - the main town - you will see dozens of buildings completed of close to completion. Some that were completed were not handed over because NO ELECTRIC! And this will be an issue for years to come. it is hardly a rich emirate (ever wonder about those projects in Ajman offering 'Lakes?' Where is the water going to come from to fill these 'Lakes?' They going to bring it in from sea across Emirates Road? Dig a well? oh well...)
6) Ajman Glut of inventory - there are tens of thousands of units completed in Town or soon to be ready. Many of those completed are empty. There is a HUGE glut of apartments completed and selling at bargain basements prices - IF they can find buyers which is harder than in Dubai. Many investors have locked into -off-plan sales within the last 18 months are that now 50% + higher than current market prices. You may think, 'Well in 2-3 years time, the prices will go up again - very, very doubtful. In Dubai? Maybe. Ajman - keep dreaming. The buyers / investors flocked there because Dubai was unaffordable for many - no longer the case. The other main reason they bought there was for the 'visa' - also no longer the case. Take away those two factors that contributed to the demand and then add the overall mistrust of the authorities and lack of consumer confidence - what do you have?
I am sorry to say, that many that have invested in Ajman will probably lose most of their money. As more and more developers will have no choice but to skip. The Ajman authorities may also like to see these developers default so THEY can try to grab those investors and convert them into buyers of their own projects. Serious conflicts of interest. My heart goes out to any honest developer that hoped to operate there.
There are always those, (including some of the brokers and speculators on this forum) whom will paint a rosy picture of Ajman and give you 1000 + 1 reasons why Ajman is great and 'NOW IS THE TIME TO BUY!' Don't believe it for a second. If you are serious in wanting to buy a RE Investment, even if you pay a little more, you'll be far more secure in Dubai that in Ajman which many have described as a 'Lawless Wild West' type of environment.
In addition, look at the cases where a project was offered as a 'freehold' then converted to a 'leasehold' !! Imagine, you purchased, been making payments and halfway through this bombshell is dropped on you, 'Sorry, it's a leasehold now... ugh.. - You should prepare yourself for more of this to come. Some are of the belief that the authorities would prefer investors to run away, throw-up their hands and never look back. This way, they can simply just pocket the money and have the last laugh.
An experts view.
An expert in what ?
an expert in buying and selling
I copy pasted comments form a guy who does this as a business
and I call him an expert in buying and selling
i have deleted your
i have deleted your reference to expert, it is misleading, especially when it is merely speculative conjecture at times and contains inconsistencies.
eg you claim, ajman potential grew on basis rent in dubai was high, now rent in dubai/props gone low, value ajman gone.
hence you argue ppl invest in dubai instead, which will go up again in few years (surely if dubai goes up, then we are back to square one again, of dubai being high thus ajman becomes attractive again), save for the lack of visa, which ajman is trying to push federal govt about, arguing its unfairness to smaller emirates.
FURTHER
i personlly think, everyone is having a hard time, investors, developers, master developers and even ajman municipalities whose funds may well be very tight too presently.
however for ajman they had a grand project, new vision for there future, so they dont want to just give up on it, and will try to salvage or make as much of it work as possible.
granted focus may well be in central ajman,
however emirates city (in contrast to other develpments on emirates road) remains a viable project - primarily because it has started
has 40-/50 towers in stages of constructions some almost at the pivotal scheduled height !
and so it would be inconcievable it not being completed.
whilst every tower may not go up, and some towers instead will become green belts, for parks play areas etc, it would still be viable.
and rather then returns on investment or even breakeven by 2010/2012, we might have to wait until 2015/2016, but in the end it will hold some value and return on investment
provided we use the stronger developers, try our best to ensure security for investment then sit tight, and also then just hope for the best.
PS - if u claim u r refering to an expert give full citation, further is he for example CPR 35 compliant as an expert ?
Musafir, Are they green belts or great pits for investors?!
It doesn’t matter whose that expert, but what is matter are the subject and the contents of his article (comments), his point view is right and I agree with him completely.
Musafir,
You mentioned in your post above:” we might have to wait until 2015/2016, but in the end it will hold some value and return on investment”!!!, What a hell is that type of investment to wait 10 or 9 years to get one bedroom apartment?!!. It is a big loss by all means; 10 years your hard earned money in other people hand, loosing many investment opportunities, frustration … etc.
If you are welling to wait for 10 years, Do you think a developer will stay 10 years as a developer for the same tower?!.
I Do Agree
I do agree with GCD-1, he has drawn a very correct picture of Ajman real estate story, he has clrealy established the intention of the Ajman authority and I am fully agree with his point of view.
We all have seen a dream and and with due respect to GOVT. of Ajman, Authority of Ajman and Master Developer (s)of Ajman, they charged us heavily for this dream and I don't see any possibility for this dream converting in reality in near future.
Nothing is free in this world, not even your dream which has been proved by Ajman trio.
God help this trio to digest the money which has been earned by cheating the poor people by selling only dreams.
Hamad, i have edited your
Hamad, i have edited your post, please try and use decorum.
as for your views.
i agree its not a good investment. hindsight is a wonderful thing, many of us, if not all would not have invested in ajman, if we knew lehman brothers would collapse, the world economic crisis, and the impact upon ajman.
consequently we are left in a situation were we are paying instalments for properties were in some cases barely the foundations are built, and such payments are above the present value of the apartments if we bought right now (negative equity payments).
negative equity is not a new phenominum, it exists in many countries, however the greater risks for investors in ajman is whether the project will actually be completed !!!
what choice do us investors have, who have already paid considerable sums into our apartment instalments ?
1. cancellation (loose 30% of property value from date we bought)
2 refuse paying anything further (which risk contractual breach, and thus cancellation by developer and loss of 30% cancellation penalty)
3. re negotiate instalments - perhaps construction based.
4 sit tight and hope for the best.
5 sell our property to someone else ( at loss as for some the price we purchases was more then present value)
6. seek constructive methods perhaps through group action and lobbing to make the project more viable (see my post on front page for demands to arra)
for developers, there in difficulties too. they have put alot into ajman too. and yes they have incurred expenses, buying land from ajman municipality, marketing/advertising., salaries of staff, it appears they also got greedy as escrow accounts only recently set up. hence prior to escow the developers were able to use deposits, and installments for plot one, to then purchase land, marketing for plot 2, 3, 4,5 etc.
which means developers if all there projects eventually reached frutation they would multiply there money tremendously.
the downside is, turn in the market.
which means
1- few people if any want to buy there plots now (and even if they do, the developer barely making profit if at all on such prices presently).
2- even those already commited to investment, some are refusing to pay anything more to developer (worrying what will happen to their money), others are asking for revised payment plans.
3. due to global financial crisis banks are reluctant to give loans (including reputable developers)
which means many if not all developers have got little money. some have lots of land, but no money to develop it (as they projections of growth and funds, collapsed with the global financial meltdown)
in light of these circumstances, those investors who are fortunate, have developers who have registteed with arra, and have set up escrow accounts ( not a small thing, bearing the above in mind) and if they are lucky, there developers are continuing construction.
so bearing all this in mind. practically what do we do ?
i for one dont want to loose any money. yes i could pull out now, and loose 30%. or i can continue and perhaps break even, or make a small profit in future.
i can further continue paying into escrow, knowing the money would be used for development of my project. but i would want assurances of this (hence further demands to arra should be sought, and perhaps payments rescheduled to be contruction linked -one risk of this is even if granted, the developer would try and sneak in clause of new completion timetable, thus on basis they have revised payment plan, that investor has longer period to pay etc, investor no longer entilled to argue late completions etc).
i will further then in future, near end of completion period etc, perhaps demand repararion from developr for late completion (if which may well be likely, developer does not complete in time)
Musafir, The EDITOR?!!
Musafir,
As I know the member of this forum can only editing his post. So, Are you one of the editors (E.C. website's staf) of this forum?!, If not, How you have an access to edit any member’s post?!.
Respond to the above questions, then I will comment on your last post.
yes
yes
what all of your forget to
what all of your forget to mention is that all the investors in ajman are paying the installments in cash, not by bank finance. so what has been done with the money?
ADMIN
Admin - Can you delete advertisements as this is a forum for Discussion on EC info and not a site for posting adverts
Thank you