| 21 May 2009 |
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Iranian Investors Returning From Dubai
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One-third of Iranian investors in Dubai have returned to Iran due to the economic crisis and the housing recession in the United Arab Emirates, Germany's official news agency reported.
According to a report by Deutsche Presse Agentur (DPA), Iranian investors have a wide presence in the UAE accounting for 10 percent of the Arab country's population. Based on recent statistics nearly 400,000 Iranians live in the UAE running 10,000 small business firms.
The global financial crisis has overshadowed Iranian investors' activity in Dubai, the report added.
Economic experts believe that since the fall of the real estate prices in Dubai, 30 percent of Iranian investors and traders have quitted activity and returned to their homeland.
During the first quarter of 2009, real estates in Dubai witnessed a 41 percent fall in value. Economists believe that financial crisis in Dubai has made remarkable opportunity for Tehran to absorb Iranian capitals via reformed laws and regulations.
Europeans Wary
Just like their Iranian counterparts, European investors have also mothballed plans to invest in Dubai's bombed-out property in favor of more familiar and mature markets, prolonging the emirate's maiden bust until at least 2011.
Prices in the emirate's once-booming real estate sector will continue to slump over the next year, with demand for property waning as expat professionals lose their jobs, while more Dubai contractors will bid for projects elsewhere.
Once a magnet for capital from European property investors, the emirate's appeal--famed for its iconic palm tree-shaped islands--is fading fast as they scramble to seize better real estate deals closer to home and elsewhere in the Persian Gulf.
Analysts are already predicting the more stable Iran, Doha and Saudi Arabia property markets to recover faster than Dubai, which is experiencing its first growing pangs.
"The consensus opinion is that the Dubai market has further to fall and this very sentiment is itself putting off investors who do not wish to catch a falling knife," said Craig Plumb, head of research at Jones Lang LaSalle in the United Arab Emirates.
Grim Outlook
A UBS report last month said Dubai house prices could fall up to 70 percent from a fourth-quarter peak.
A poll by Reuters in March showed prices were likely to fall more than 40 percent in 2009 and 2010 before recovering in 2011.
"Dubai is not one for us. I much prefer long-term established locations with underlying intrinsic attractions or clear, sustainable competitive advantages," said Bill Hughes, managing director of Legal and General Property.
By contrast, the battered Iranian housing market is expected to show early signs of revival, with an uptick in investment demand seen in the country long before Dubai.
Property prices in Dubai, dubbed as the world's biggest construction site, soared sharply after the emirate opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments.
From early-2007 to mid-2008, prices rallied almost 80 percent, Morgan Stanley estimates showed. The bubble burst spectacularly late in third-quarter 2008, leaving the region laden with half-built projects.
The financial market turmoil has caused significant injury to demand in Dubai's property market as thousands of jobless expat professionals are forced to leave the emirate.
UBS said Dubai's population is likely to fall 10 percent in the coming two years as a result of foreign worker job cuts, with residential vacancy rates reaching up to 30 percent in 2010 due to an expected oversupply.
Several Dubai-based contractors are also seeking opportunities further afield as work dries up and competition for new projects intensifies.
More than half of the construction projects in the UAE, worth $582 billion, have been put on hold. While abandoned buildings and empty luxury homes provide a stark reminder of Dubai's dramatic property bust, the small number of investors with cash to spend on real estate will be keeping their powder dry.
Compiled by Ghanbar Naderi
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Community Comments (10)
Many foreigners and media are saying that Dubai is not great. I have one simple question: Why would all these foreigners come to Dubai if Dubai was not GREAT and SECOND TO NONE?Why all the flights from London to Dubai are FULL and just Yesterday Virgin Atlantic announced that it's increasing its frequency to Dubai due to high demand or Sir Richard Brighston does not know what he is doing? What is in Iran and Canada??Jealousy has crossed all limits. This country is for its people and whoever does not like it should simply and politely leave to his own place that he believes it's superior. This country was made by a great leadership and Sheikh Mohammed manifestly proved that he is more capable that all the top economists of the world. Dubai is FULL and i am unable to get SEATS to anywhere!Our countries are FULL of endless wars, corruption, misery, sombre future, very low standard of living, poor infratsructure, High taxes, lack of opportunities and a million bad things. Had we had a better chance else where, we would not have come here from the beginning! So let's put our head down, respect this country and keep on working hard! or have some dignitiy and head to the airport!
Nice excuse dear, the reality is UAE should treat everyone as per the law... especially since they are desperate for iranian money
If Dubai didnt ease the residence for the Iranian (even investors), its not their mistake, the official Iranian behaviour is the reason of that.
Do u expect emirates to give up their country to the Iranian who think they can control the middle east. look to Lebanon, they buy by the Iranian people money Lebanese lands and some Lebanese r getin paid from Iranian wealth while Iranian people in in poor.
Look to Syria, The Iranian r building universities, but there r no students attending them, so they bring foreigner students too!!!
U SHOULD BLAME THE IRANIAN LEADER WHO MAKE ALL PEOPLE PASS UP THE IRANIAN WHO R TREATED AS LEPERS.
its makes no sense to give iranians hard time for residency visa as done with nationalities such Somali, Iraqi, Yemeni, out fear of mass imigration while the wel known gossip of naturlizes emiratis from Iranian backggound ( Ajaam).
No one has an answer...
Lets see I was promised a residence permit for my Emirates Hills Villa, turned out to be a lie after I invested 50Million. Then I was told to buy an office in DMCC, Jumeirah Lakes from the government and obtain a company to get the visa for myself and my family who are attending school currently. After buying the office, yet again the government lied and did not issue a residence visa. So I sold my villa for 18million & nobody is ineterested to buy my office. I have got a permanent residence permit in Canada with just $1million and I know I will be treated equally as per the law.
... I am happy to see Iranians leaving dubai because Dubai needs to learn to respect its biggests asset: THE FOREIGN INVESTORS
With all due respect to Mpower, I would like to highlight some points about the iranian investors.
Sir, Iranians were the first investors in Dubai. That is why half of the emiratis are of iranian origin and carry a surname associated with a village or a tribe in southern iran. The iranian investments in Dubai according to chamber of commerce is in excess of $300billion. Iranian governments policies made sure the iranians were attracted to dubai for a better quality of life and enjoy the wonderful services available in dubai.
However, whether we admit it or not, dubai has been unfair to iranians, in making it difficult for them to get residence visas & whatever was promised with the freehold properties turned out not to be true which resulted in billions leaving dubai.
The first step to fix a problem is to admit it and then look for a soloution. So far dubai has been living in denial. There is a growing mistrust between the foreign investors towards what dubai says and what dubai does.
On top of that, look at the case of the well known iranian businessman Dr. Shahram A. Zadeh, he was falsely imprisoned in 2008 for 60 days without any rights, any lawyer or any charges and at the same time a sheikh has taken over his company. I am not going to judge who is right, but why is the police & the authorities quiet about holding someone for 60 days without charges and keeping his passport for over a year? These are the real reasons for the iranians to leave dubai. International media and iran media have carried many stories about his $1.9billion lawsuit in dubai court, but the local authorities are turning a blind eye to everything.
This is sad for dubai. As an Iranian who loves dubai and is born here i would like to help dubai but it seems dubai government is not realising that money is not returning to iran but to qatar, oman, turkey.
Dubai has to be more transparent and implement the rule of law. The govenrment owned developers have to act more responsibily.
I totally endorse the views. The law of dubai is lop sided and there is complete human rights violation. Expats come here to work but whenever there is a dispute a local emirati is given proper hearing and protection. Dubai needs to change. The case of the iranian business man and the Royal member of Abu Dhabi of the Royal Family are not isolated cases. There are many such cases everyday which go unreported or people are afraid to report. The ruler of dubai should have a mechanishm where everyone is treated equal just like in the US
Iranian money is starting to leave dubai, if dubai does not change its attitude it will be too late.
From deira's al ras, to all the shopping malls , golght them waterd souk, to the high end offices in sheikh zayed road, DIFC, Free Zones its full of Iranian money. Emaar's official figure is 56% of its properties sold to iranians yet they give us a hard time for residence visas??? Who needs dubai when the whole world is begging us to go there with a good capital.
Its about time dubai sheikhs remembered who they were before the iranians came to dubai.
Dear sir , (Mr. Chairman)
Such a fantastic comment , thank you . I wish you best of luck .
Maybe this is what Dubai needed, a recycling of investors; it clearly shows what nationalities are here for the long term and committed to the economy and one's that came to make a fast buck and speculate.
On the long term this is good for the economy as speculators cause more harm then actually benefit to the country.
However, U.A.E should do the same by not changing policies and regulations like stock fluctuations in the Dubai Financial Market.
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