Egypt's New Capital

This is a creation of Capital Region.. despite the failed Megapolis..

Unfortunately, Egyptian Planners did not adhere to the decentralization concepts, which had made many nations, wealthier, healthier and mightier.. Adding 30% to existing urban land is not a solution.. Threats of Eastern-Invasion are not valid anymore..! However, threats of urban poverty are more likely and further destructive..

Egyptian "Urban Lobbyists" had created a distinct culture, which many middle-eastern nations had copied, and further excel.. Property is a market known for secrecy, which enables monetary greed to grow.. Urbanity is synonymous for the Excellence of Living.. Urban poverty is not measured by building quality, but by Tenants Quality, which is not only the GDP share, but scores at MGDs.. Egypt sharply slumps, despite the generous donations and loans.. despite the fantasy homes on the desert..!!

RE Biz..

 

I had a hot discussion with a friend of mine; on the root-causes of RE Bubble in Dubai.. The difference between polite and straightforward descriptions had already allowed for twisted definitions to rule and deformed concepts to function..!

Certainly, who knows is far unequal to who doesn't.. Therefore, it is understandable why the ICT breakthrough did not help increasing the common knowledge, but the expansion of fun-times.. Check statistics of online gaming and entertainment among search engines..!

I already endorse the notion that "Stupid" people, who happened to own fortunes, and don't do their own homework to validate their RE adventures, are causing the Real Estate (RE) dilemma.. They escalate the market; allowing the "Bad" guys of RE-Biz to grow and harm the overall economy..

In USA and most of G8; RE Frauds are Federal and Criminal offenses; which indefinitely prevent competition to public office.. It is a great moral and business pitfall..!

RE Biz is based on End-users not Speculators.. The Rich-ones of Dubai had already "Flipped" the formula, allowing new element to disturb the RE market pricing.. They are hard working professionals; who know "Nothing" about RE, and never "Try" to know.. They are the target of the "Ridiculous" RE Marketing & Sales campaigns.. They are who had lost fortunes in 2009 Downturn, and would repeat it again.. This is what RERA try to rule and organize.. (RERA=RE Regulations Authority)

On parallel; the "Gangsters" who outstandingly earn from money-laundry, people-trafficking and entertainment-services, have open eyes on both details and market facts.. Similarly the "Conscious" Industrialists who had carefully grown their own fortunes.. Both are not speculators, but professional investors..!

It is not how smart those "Greedy" developers are, but how unethical; as every business endeavor should have code of ethics.. Not to earn on the expense of the ill-informed; who often does not know the appropriate cost or specifications.. This is criminal in the views of any good governance and best practices..

Opportunism is not a sound professional or business model, despite how many already practice.. Procurement Governance is how to practice an open book business; whereas actual costs, profit and contingencies are debatable.. Yes, it is still problematic among G8, UN, WTO and EU; yet no one promotes otherwise..!

To make the world a better place, we need to stand firm for confirmed frameworks, against malfunctionalism and with enforced governance..
Making-money, Go-getting or Social Pragmatism are synonymous to unsustainability, abuse and fragmentation; which had already jeopardize human civilization..

كان لي نقاش ساخن مع إحدى الصديقات ، حول الأسباب الجذرية لفقاعة العقارات في دبي .. ولعل هذا في سياق قناعتي بأن الفارق بين تهذيب ووضوح الأوصاف قد سمح بالفعل للتعريفات الملتوية أن تحكم ، وللمفاهيم المشوهة أن تُوظف

بالتأكيد ، من يدري ليس متكافئاً مع من لا يدري .. ولذلك ، فإنه من المفهوم لماذا لم تساعد ثورة تكنولوجيا المعلومات والاتصالات على زيادة المعرفة الجماعية ، و لكن أدت إلى توسع ممارسة المرح .. ويمكنك التحقق من إحصاءات الألعاب والتسلية عبر الإنترنت وبين سائر محركات البحث

إنني أؤيد بشدة فكرة أن "غباء" الناس ذوي الثروات الخاصة ، الذين لا يقومون بمجهودهم البسيط للتحقق من صحة المعلومات قبل شروعهم في مغامرات العقارات ، هي المعضلة الحقيقية .. وهم بذلك قد سمحوا للمطورين العقاريين "ذوي النوايا الآثمة" من الإضرار بالمجتمع والاقتصاد

في الولايات المتحدة الأمريكية وكافة البلدان الصناعية ؛ الاحتيال العقاري يعد من الجرائم الاتحادية و الجنائية ؛ والذي يمنع لأجل غير مسمى ، المنافسة لشغل المناصب العامة .. بل هو بمنطق الأخلاق والأعمال جرم عظيم

يستند نشاط العقارات على مستخدمي العقار وليس على المضاربين فيه .. والطبقة المقتدرة في دبي قد قلبت الموازين بالفعل ، مماقد خلق عنصراً جديداً أدى إلى اضطراب التسعير العقاري في السوق .. هؤلاء من المهنيين العاملين ؛ الذين يعرفون "لا شيء" حول العقارات ، وأبداً "لا يحاولون" أن يعرفوا .. كانوا هم الهدف من "سخف " حملات التسويق والمبيعات العقارية .. هم الذين فقدوا ثرواتهم في الانكماش الاقتصادي عام 2009 ، و سوف يكررون ذلك مرة أخرى .. هذا هو ما تحاول سلطة التنظيم العقاري أن تحكم وأن تنظم

على نحو موازي ، فإن "رجال العصابات" الذين يكسبون الكثير من غسل الأموال ، الاتجار بالأشخاص ، و خدمات الترفيه ، لهم عيون مفتوحة على كل تفاصيل وحقائق السوق .. وبالمثل ، فإن رجال الصناعة "ذوي اليقظة" الذين كان قد بذلوا العناية في تنمية ثرواتهم الخاصة .. كلا ليسوا مضاربين ، ولكن مستثمرين محترفين

انها ليست ذكاء أولئك المطورين "الجشعين" ، ولكن التردي الأخلاقي ؛ فكما أن كل مسعى في الأعمال يجب أن يكون خاضعاً لقواعد السلوك .. لا للكسب على حساب قلة علم الزبائين ؛ الذين في الغالب لا يعرفون التكلفة أو المواصفات المناسبة .. إن هذا لهو عمل اجرامي بمنظور الحوكمة الرشيدة وأفضل الممارسات

الانتهازية ليست هي المهنية السليمة أو نموذج الأعمال التجارية ، على الرغم من كم من يمارسونها بالفعل .. ان حوكمة التعهيدات هي كيفية ممارسة الأعمال التجارية على كتاب مفتوح ، حيث تكون التكاليف الفعلية والأرباح والمصروفات قابلة للنقاش .. نعم ، لا يزال الأمر موضوع إشكالية داخل البلدان الصناعية ، والأمم المتحدة ، ومنظمة التجارة العالمية ، و الاتحاد الأوروبي ، ومع ذلك لا أحد يشجع على التغاضي عنها

لجعل العالم مكانا أفضل ، فاننا بحاجة إلى الوقوف بحزم لتأكيد أطر الممارسة السليمة ، والوقوف ضد التصرفات القاصرة ، ودعم الحوكمة
صنع المال ، حقق الهدف ، البراغماتية الاجتماعية ؛ هي مرادفات لعدم الاستدامة وسوء المعاملة والتشرذم ؛ وتؤدي الى تعريض الحضارة الإنسانية للخطر

UAE Finances Strengthening; But Risks in Dubai - IMF

A view from the famous Dubai Marina high-end district

The United Arab Emirates is succeeding in strengthening its state finances by restraining spending, and managed last year to reduce the oil price which it needs to balance its budget, the International Monetary Fund said on Thursday.
But the possibility of another boom-and-bust cycle in debt-laden Dubai is a risk for the UAE economy in the medium term, the IMF warned after the emirate announced a string of huge real estate development projects.
The IMF's report, released after annual consultations with the UAE, indicated the country is doing more than other Gulf Arab oil exporters to rein in growth of government spending and reduce its vulnerability to any steep fall of the oil price.
Hit by the global financial slump, Gulf Arab countries boosted spending sharply from 2009, and increased it further in the wake of the Arab Spring uprisings of 2011. The higher spending has succeeded in keeping economies growing, but means state budgets could fall into deficit if oil prices slide.

The UAE began curbing its spending last year, more than doubling its total fiscal surplus - the combined surplus of the federal government and all of the UAE's seven emirates - to 8.8 percent of gross domestic product from 4.1 percent in 2011, the IMF calculated.
This lowered the oil price which the UAE needs to balance its combined budget to $74 per barrel last year from $84 in 2011, the IMF said. Brent crude oil is now around $103.
By contrast, other Gulf Arab countries continued to increase state spending substantially last year and their budget break-even prices have been rising.
The IMF said it welcomed the UAE's plans to continue consolidating its finances: "For 2013, continued fiscal consolidation of around 2 percent of non-oil GDP is planned.

"Fiscal consolidation is expected to be driven by a rationalization of capital spending and subsidies and transfers, while spending on goods and services, defense and security, and the wage bill are expected to increase."

The UAE's finances are difficult to analyze because oil-rich Abu Dhabi, which accounts for roughly 80 percent of the country's fiscal spending, does not publicly release details of its annual budgets and outcomes.
In October, the federal finance ministry published 2011 consolidated fiscal data, releasing such information for the first time ever, but there has been no update on 2012 so far.
Because of lower oil prices, the IMF predicted the UAE's fiscal surplus would shrink to 8.1 percent of GDP this year, before narrowing gradually to 5.1 percent in 2018.
Despite its approval of the UAE's overall policy direction, the IMF warned of risks in Dubai, which suffered a crippling corporate debt crisis in 2009 but is now recovering strongly on the back of rebounding real estate prices.
"At the emirate level, a faster pace of consolidation in Dubai would be desirable to address the emirate's continued debt-related risks," the IMF said.
It also described "insufficient domestic policy reform to mitigate the risk of a renewed boom-and-bust cycle" as a risk for the UAE economy.
"Renewed optimism fuelled by rising real estate prices and loose global liquidity conditions could prompt a renewed cycle of imprudent risk-taking and re-leveraging by GREs (government- related entities) and private companies, which could also affect banks' balance sheets in light of their strong interconnectedness with GREs.
"In the absence of prudent policies, this could fuel short-term growth at the expense of medium-term stability."

Dubai's total debt remains substantial at $142 billion, or around 102 percent of its GDP, and $35 billion of that amount is in government and government-guaranteed debt, the IMF said.
The emirate's GREs have increased their debt to an estimated $93 billion from $84 billion in March 2012, and about $60 billion of that debt falls due in 2013-2017, it added.
In the last few months, state-linked Dubai companies have announced billions of dollars of new real estate projects. For example, last week Emaar Properties and Meraas Holding said they formed a venture to develop a huge area near Dubai's downtown; a commercial center, low- and mid-rise residences, an 18-hole golf course and other facilities would be built over 11 million square meters (2,700 acres).
"While further investment in the development of Dubai's economy is welcome, the authorities should ensure that, in line with current intentions, execution will be gradual and flexible depending on demand," the IMF said.

"New investments should be structured in a way that strictly limits risk-taking by the still highly indebted GRE sector," it said, adding that availability of financial data on the health of Dubai's GREs was still inadequate.
After protests by UAE commercial banks, the central bank (CBU) has postponed introducing planned caps on mortgage lending and loans to government-related bodies. The IMF said such rules were important to ensure financial stability.
"Looking ahead, the CBU should carefully monitor the interaction of mortgage lending and the real estate sector, and tighten the mortgage regulation or introduce new measures as needed," it said.

http://www.arabianbusiness.com/uae-finances-strengthening-but-risks-in-dubai-imf-505102.html

From The Expert..!

Charles Neil

CEO Landmark Advisory (Research and Consultancy)

CFO Landmark Properties.

During the last few weeks, once again after the limited influx of moneys from Arab Spring Countries into Dubai (as estimated in $10 Bln), with corresponding activities in property market (around 3000 units).. Talks grow on the coming back of the golden times.. This was indirectly supported by the official campaign and planning to gear up the Emirate for Expo 2020, which in any vision requires flourished businesses and sparkling opportunities.. However, the root-causes of the 2008 bubble still uncleared, awaiting for innovative plans to utilize around Sq.Ft 200 Mln of ready RE products, or the equivalent to 100,000 units.. This is what constitutes the famous 2008 debt crisis.. As how such money cycle is huge, some had gained from both naivety and distinctions of this market; and yet aim to continue gaining.. To secure a sustainable RE market in Dubai, the Experts should speak out..!

During the last 8 years; Charles joined the top decision making circle of Real Estate.. Following; are his solid comments as shared on Linked-in

The Dubai market is running ahead of itself in my opinion. There is still a lot in the way of existing construction that has yet to come on the market without having new projects being announced. what amazes me is that people are prepared to buy off-plan after the losses so many investors incurred post 2008. all I can think is that it is the speculators at work again who ruined the market in 2007/2008 by causing the bubble, then damaged the developers by defaulting en masse, and are now all set to create another bubble. The serious investors should not allow themselves to fall prey to the hype that is going on..

The serious investors should not allow themselves to fall prey to the hype that is going on , the laws on the subject of "off-plan "while better do not still adequately protect the investor , they are one-sided in favour of the developers. it is far better for an investor to buy an existing property and start earning income from it from day -one rather than wait for 3 years for handover. The speculators hopefully will get their fingers burnt as the serious investors will stay away until they see what they are actually getting for their money..

The developers should also be wary of the speculators, they were burnt by them before and will be burnt again if they think they can rely on them to fund their obligations through to the end. One word of advice, if you are going to buy off-plan, never , never, take a mortgage, this has been a complete minefield for serious investors who have to sign in to tri-partite agreements and lose all leverage over the developer in the handover process , and end up paying off mortgages even though nothing has been delivered, and run up huge interest bills if the project is delayed. If you are going to take a mortgage it should only be for a completed unit..