Reality vs Fantasy: Is Dubai’s Real Estate Price Appreciation Out of Reach?

Tim Elliott (0:00)

Real Estate on the Morning Drive now, and specifically the Dubai Property Appreciation Fantasy. Who is going to pay you 50% more? Question mark, Ajay Menon is with me, CEO of Luxe Vista Real Estate. Your weekly visit, nice to see you.

Ajay Menon (0:16)

Nice to see you, Tim.

Tim Elliott (0:17)

Smelling good, nice, perfect. Again, we've had our aftershave moment. I don't know what's happening in this studio. The ladies are going wild in my head, as always. Nice to see you.

Before we go anywhere with today's topic, you've been at IPS. Yes, I was at IPS yesterday. Tell me about the show.

Ajay Menon (0:36)

We've got those IPS happening from yesterday till tomorrow. Is it a good image to portray? Yes, there is a lot of action happening.

But it's the usual suspects. I'm just a bit disappointed because I don't see any of the big government-backed developers out there. It's the usual mid-market, mass-volume coming up with a lot of offers and those kinds of things. These are the people who are out there.

Tim Elliott (1:03)

Really?

Ajay Menon (1:04)

Though there is a DLD there. There is a lot of government departments there who are actually trying to provide the support.

Those are all fantastic. But I would like to see a lot more government-backed and government developers in that show. Because it's going to be completely misleading for somebody who actually comes there to buy a property or to invest in a property. The only ones available are the mass marketer, the mass volume ones.

Tim Elliott (1:29)

Why are they not there?

Ajay Menon (1:31)

You have to ask them.

Tim Elliott (1:32)

Yeah, I suppose so. It just strikes me as well. But what about in terms of football? Football. Let's talk football as well.

Busy?

Ajay Menon (1:41)

It was busy, but is it the right kind of busy, I would imagine, because I've seen a lot of brokers there. But how many of them are actually buyers?

Tim Elliott (1:52)

Very good question. Not that many.

Ajay Menon (1:54)

Not that many. I would put around 15% max.

Tim Elliott (1:57)

It was kind of early in the season, though, isn't it, for a property show? Or am I reading it wrong? You don't think so?

Ajay Menon (2:02)

It's fine. I mean, the timings are all correct. I mean, okay, if they had moved to one more month during the winter, then probably a bit more on the touristy side.

Tim Elliott (2:11)

Yeah.

Ajay Menon (2:12)

But other than that, it was okay. Nothing. I mean, we've got other exhibitions running packed anyways.

So.

Tim Elliott (2:20)

Okay.

Ajay Menon (2:20)

They could do better.

Tim Elliott (2:21)

The jury's out, isn't it? I can tell. I'm trying to read between the lines. Look, so the topic today, Dubai Property Appreciation Fantasy. I'm going to let you launch in here. I've got lots of questions. I'll kind of interject with questions, but your notes, as always, pretty comprehensive.

The first question I would have to kick this off, I suppose, is what do you mean by fantasy? What about the reality?

Ajay Menon (2:48)

Exactly. I mean, fantasy is that. Everybody, just take a nice dictionary, you understand, you read about the definition of fantasy, it is that.

La, la, land, right? Anyway, what I mean by that is basically, it's very easy. I mean, it's very easy for you to decide what price you want by looking at the purchase price today.

Tim Elliott (3:09)

Yeah.

Ajay Menon (3:09)

But the thing is, you have to do a little bit of reverse engineering. It's, you need to ask at, it's not like how, what price I can sell it at that particular, say, in 2030 It's like the, what is the price per square foot that I'm trying to achieve with this particular price in 2030? And will the market take me there?

Will the market go to that price per square foot so that I can expect that kind of money or that kind of sales price when I want to sell it in 2030?

Tim Elliott (3:41)

Okay, well, we're really talking about investment buyers here, because, you know, I'm listening, thinking, I don't look at it this way at all. This is not my way of...

Ajay Menon (3:52)

No, this is not for end users. This is just purely for investors.

Tim Elliott (3:56)

Yeah, okay. Okay, so give me an example then. Give me some figures.

Ajay Menon (4:00)

Imagine you buy a one bedroom apartment, everybody's favorite choice, 750 square feet, 1.2 million dirhams. That's 1,600 dirham per square foot.

Tim Elliott (4:11)

Okay, all right. And that's a standard. That's a realistic standard, actually.