http://www.oryxrealestate.com/Blog.asp Oryx - News Oryx Corporation Fri, 16 May 2008 11:45:03 GMT info@oryxrealestate.com The price of oil spiked to $128 a barrel last week and has been taking Dubai house prices up with it. Even the most cursory survey of price changes over just the past two months shows 10%-15% increases across the board. This is probably the highest rate of change in Dubai property prices since the modern freehold revolution began in 2002. AME: United Arab Emirates: Sunday, May 18 - 2008 at 14:27 In the US, the collapse of house prices since mid-2006 has been followed by the sub-mortgage crisis since last August. The policy response from the Federal Reserve has been to lower interest rates dramatically. This will allow banks to recoup their losses by increasing the spread between borrowing and lending charges, and gradually put a floor under house prices. This dramatic loosening of monetary policy has had the nasty side-effect of stirring up commodity price inflation, most particularly in the oil market. For an oil-exporting country like the UAE, this means huge additional liquidity is flooding the banking sector with money supply rising at 37%. Dollar pegAt the same time the UAE has its currency pegged to the US dollar so the nation has to track US interest rates downwards. Hence you have interest rates falling at a time of rising inflation, in short very high negative real interest rates. That means the economy is effectively paying you to borrow money. So is it any surprise that there has been a huge dislocation of funds into real estate, further increasing upward pressure on prices? This is not over yet by a long way. What message does a gain of 10%-15% in two months send to the marketplace? What greater encouragement do investors need when alternative investments all over the world look sick? Well, how long will this last? Price gains of this intensity are not usually sustainable for long. But a 50%-100% increase in property values over the next six to 12 months is quite possible. After that the market would move sideways awaiting confirmation of its optimism. Oil pricesNow with Goldman Sachs predicting an oil price spike of $150-$200 within the next 18 months that would suggest very much high property prices are obtainable and will be sustainable at least within that timeframe. And let us not forget the supply side argument either. UBS has forecast that new property supply will begin to impact on the Dubai market by 2010, and if that came along with a downshift in oil prices - perhaps due to a global recession - then that would finally signal the correction. But not before house prices reached very much higher levels than we see in the market today, with even observers from the world's most highly priced property markets becoming shocked by prices in Dubai. Currently they still find the market good value. Tuesday, 20 May 2008 'The Lagoons', a freehold, mixed-use project being developed in the heart of Dubai by Sama Dubai, the international real estate investment and development arm of Dubai Holding, won awards in two categories - 'Best Mixed-Use Development' and 'Best Corporate Social Responsibility' - at Cityscape Abu Dhabi. Designed to celebrate excellence in real estate development and investment in the Middle East, Cityscape Abu Dhabi Real Estate Awards were presented at a ceremony at the Emirates Palace Hotel. Industry professionals and senior executives from the real estate industry, as well as several high profile guests from the region, were present at the ceremony to honour their peers for their outstanding achievements. Winners were chosen by a panel comprising the most acclaimed international industry experts. Tuesday, 20 May 2008 Damac Properties yesterday announced the completion and delivery of 572 units of its iconic Lake Terrace project at Jumeirah Lake Towers. Reinforcing the company's focus and commitment to the delivery of projects, Damac has announced plans to deliver over 2300 units in 2008, followed by an additional 7100 units in 2009-10. In 2008, Damac will also deliver 527 units in Lake View located at Jumeirah Lake Towers, 192 units in Executive Heights project at Tecom, 198 units in Tera Del Sol 1&2 and 848 units of The Crescent, located at IMPZ. In 2009/10, they will deliver a further 7100 units. Sharing insights on Damac's focus and determination on delivery of projects, Hussain Sajwani, Chairman of Damac Holding, said: "There are over 2100 projects either planned or under way in the Gulf region and over 23 per cent of these projects are located in Dubai. The property boom in the region, especially Dubai, has far exceeded the region's capabilities to develop these projects on time. The region has been facing a steep challenge on delivery of projects due to shortage of quality contractors and the rising costs of construction material. The delivery of our Lake Terrace project is a step towards our commitment and focus on completion of projects. At Damac, we are determined to ensure that we go all the way to get our customers their homes as quickly as possible." He further added: "2007 saw a far slower pace of completed projects, with handovers of only 11,000 units of the expected 57,000 units across the region. In 2008, Damac will deliver over 2300 new units and we expect to deliver an additional 7100 units in 2009/10. To keep up to our commitment, we are working closely with all our contractors and providing them the necessary support mechanism towards timely completion of projects." In his comments, Peter Riddoch, CEO of Damac Properties, said: "We would like to congratulate the owners of the Lake Terrace on the possession of their new homes. Lake Terrace an example of contemporary architecture overlooking a picturesque manmade lake, is another luxurious offering from Damac." Monday, 19 May 2008 Damac Properties yesterday announced the completion and delivery of 572 units of its iconic Lake Terrace project at Jumeirah Lake Towers. Reinforcing the company's focus and commitment to the delivery of projects, Damac has announced plans to deliver over 2300 units in 2008, followed by an additional 7100 units in 2009-10. In 2008, Damac will also deliver 527 units in Lake View located at Jumeirah Lake Towers, 192 units in Executive Heights project at Tecom, 198 units in Tera Del Sol 1&2 and 848 units of The Crescent, located at IMPZ. In 2009/10, they will deliver a further 7100 units. Sharing insights on Damac's focus and determination on delivery of projects, Hussain Sajwani, Chairman of Damac Holding, said: "There are over 2100 projects either planned or under way in the Gulf region and over 23 per cent of these projects are located in Dubai. The property boom in the region, especially Dubai, has far exceeded the region's capabilities to develop these projects on time. The region has been facing a steep challenge on delivery of projects due to shortage of quality contractors and the rising costs of construction material. The delivery of our Lake Terrace project is a step towards our commitment and focus on completion of projects. At Damac, we are determined to ensure that we go all the way to get our customers their homes as quickly as possible." He further added: "2007 saw a far slower pace of completed projects, with handovers of only 11,000 units of the expected 57,000 units across the region. In 2008, Damac will deliver over 2300 new units and we expect to deliver an additional 7100 units in 2009/10. To keep up to our commitment, we are working closely with all our contractors and providing them the necessary support mechanism towards timely completion of projects." In his comments, Peter Riddoch, CEO of Damac Properties, said: "We would like to congratulate the owners of the Lake Terrace on the possession of their new homes. Lake Terrace an example of contemporary architecture overlooking a picturesque manmade lake, is another luxurious offering from Damac." Wednesday, 14 May 2008