Dubai property - huge scam - don't buy Dubai property

badinfleunce

Remember the bill boards all over Dublin offering Dubai property and the chance to win millions . Well for those who took the hook and bought a Dubai property they are now finding themselves in a market that is not only falling quicker than they built their first skyscrapper but some are finding themselves caught up in elaborate scams where apparently millions have been handed over to developers who never owned the land their said project was supposed to be built on.

It all sounds like a Bernie Madoff scam of the Dubai property market.

Kabir Mulchandani, chairman of Dynasty Zarooni, a prominent Real Estate in Dubai was detained by police last year after allegations of a huge property scam defrauding international investors of 123million Dollars.

From a non existent advertising campaign in 2007 to a 10.5million dollar ad spend in 2008 they launched the Ebony and Ivory towers in Dubai, a billion dollar dubai property development project, and took investors deposits (20%) downpayment on a project that they didnt own the land for. Nothing has happened on the land since and investors believe their money has been stolen. Another case was published in the Dailymail There are also other cases of developers in dubai just going missing and worried investors as they realise that their life savings and investments are sinking in the quick sand

According to a Dubai blog they claim that Dubai's courts are struggling with a mountain of property cases totalling £3billion - as much as £500million may involve British and Irish investors.

I think Irelands situation is mild compared to this. I wonder how Nama will value these type of investments where the property is paid for and the land is not owned by the developer.

scotchy

Speaking as someone who over the last ten years or so has had to endure listening to people telling me I was mad not to be getting into investment properties, either in Ireland, Bulgaria, Dubai or wherever. At the time I thought these investments where overpriced and not a realistic way of generating a profit.
I now find it hugely annoying that I am one of the people in this country who is expected to pay through the nose for their idiocy.

.

badinfleunce

Without trying to witch hunt individuals or companies I wonder how many investors from Ireland have been caught up in these scams and how will these loans be repaid if the companies these investors paid their money to are now either heading for insolveny or they never bought the said land for the projects/developments they sold. The more I google this, the greater this problem seems to be in Dubai. This has not been considered by Nama and I now wonder will the Irish Tax payer be footing the bill for investments that have non existing assets and how many of these are there?

who the fug

What I could never understand about investing in Dubai is why when you when you as a non native have no legal recourse if something goes wrong would you do it.


Ask Mr Al Fayed abut taking a native to court

badinfleunce

I purposely stayed away because, although attractive a few years ago, the fact that a local would have to own 51% of your business put me off straight away.

The_Conductor

badinfleunce wrote: »

I purposely stayed away because, although attractive a few years ago, the fact that a local would have to own 51% of your business put me off straight away.

Its the exact same in all those schemes in Goa and other parts of India- you needed a local intermediary to 'own' a majority stake in your purchase (holiday home or whatever)- which didn't appear to deter a significant number of potential purchasers......

Its not unusual to limit the rights of foreigners to own property in a sovereign state- the majority of EU countries have similar restrictions, and for an extreme example- look at Switzerland.........

badinfleunce

My real question is - are our kids to pick up the bill for non existing investments and how will Nama bottom this one out?

Contracts that are worthless, developers in Dubai going missing over night without a trace - phones cut - websites down - offices shut.

These type of loans will be put into Nama and there will be nothing in return because the assets are non existent.

Id like to know what is the loan value of these investments and will this ever be brought to the forefront?

The_Conductor

Yes, our kids and possibly our grandkids- will be the ones picking up the tab for these 'investments'. While NAMA is an off-book exercise- it increases our actual national debt to almost 100% of GDP- and in the absence of the 10% increase in net value of its loan book over the next decade, as pencilled in by our Minister for Finance- it is going to be a millstone around all our necks (totally aside from the 27 billion we borrowed for government expenditure in 2009, the 23 billion for 2010 and the 18 billion for 2011 that they've pencilled in).

NAMA is a millstone around all our necks- but even in a worse case scenario- it only represents 2 years of our current borrowing requirement for government expenditure. You've seen the wailing and groaning over the 5% cut in public sector pay and the very minor social welfare cuts- those cuts are a pittance compared to what we need to do.

NAMA is almost a welcome distraction from the abmismal state of the government's day-to-day expenditure, its an ugly creature we can put on a pedestal and throw rotten eggs at- when in reality- even if it looses half its asset value (which is possible, but improbable), its loss would still only represent less than our annual overspend on current expenditure.........

We need regime change.........

dny123456

scotchy wrote: »

Speaking as someone who over the last ten years or so has had to endure listening to people telling me I was mad not to be getting into investment properties, either in Ireland, Bulgaria, Dubai or wherever. At the time I thought these investments where overpriced and not a realistic way of generating a profit.
I now find it hugely annoying that I am one of the people in this country who is expected to pay through the nose for their idiocy.
.

A lost opportunity for smugness. It must be galling alright!

I'm one who endured listening to people telling me i was mad not to be getting into property. Now I listen to people telling me how smart they were not getting into property. I realized the market was overpriced, but went ahead and bought anyway, as I needed a home and realized that there was much safety in numbers. I'm glad you'll be paying my mortgage once I default. Hows that for smugness!

deadinterest

dny123456 wrote: »

A lost opportunity for smugness. It must be galling alright!

I'm one who endured listening to people telling me i was mad not to be getting into property. Now I listen to people telling me how smart they were not getting into property. I realized the market was overpriced, but went ahead and bought anyway, as I needed a home and realized that there was much safety in numbers. I'm glad you'll be paying my mortgage once I default. Hows that for smugness!

About as much dignity as Kim Kardashian!

dny123456

deadinterest wrote: »

About as much dignity as Kim Kardashian!

Did you miss the "How's that for smugness?"

badinfleunce

dny123456 wrote: »

A lost opportunity for smugness. It must be galling alright!

I'm one who endured listening to people telling me i was mad not to be getting into property. Now I listen to people telling me how smart they were not getting into property. I realized the market was overpriced, but went ahead and bought anyway, as I needed a home and realized that there was much safety in numbers. I'm glad you'll be paying my mortgage once I default. Hows that for smugness!

I think your missing the point its not about A mortgage or your mortgage its about millions of euros that was invested in Dubai by Irish investors and the dubai developers pulling the plug before the developments are complete or in some cases where they have taken massive deposits on Dubai property and its is now non existent - no properties - no deposits - no developers but huge loans that were borrowed from the Irish banks for speculative purposes still have to be paid. Is this fair on the tax payer? Shouldnt the banks be absorbing this and the people who borrowed these enormous amounts be made pay up in what ever capacity?

I commend anyone who took a chance to buy a property during the good times. It was a natural course of action and with the huge returns on investment in a very short space of time you were mad not to have been in on the act. Its not the investors we have to blame its the government for not having control over the whole market and the banks for lending when they clearly have economists who were intelligent enough to forecast the outcome of our massive infaltion. We are now bailing out the banks because they did not follow their guidelines and lending policies. They lent willy nilly to any dog on the street and threw in a car, a holiday and a few bob for good measure. They had the control and should have implimented this control when they saw things heating up. If they did we would not be in this mess now.

So I think smugness on all sides regarding the purchaser, the non purchaser and the investor is simply a nonsensical arguement. Hindsight is a wonderful thing, however we are not learning from this situation as little has changed in our banking systems and the same people bar a few are still generally employed throughout and running these businesses (banks).

There is little foresight out there and to me this is worrying as there was never a plan b or emergency strategy and the path forward is very short with no direction and little planning.

I think we are being dupped by Nama and I disagree with its creation. We should part nationalise the banks and let the Tax payer get some return from these bad debts in the form of an equity stake in these institutions.

deadinterest

dny123456 wrote: »

Did you miss the "How's that for smugness?"

The emotionless internet confuses me sometimes.

badinfleunce

deadinterest wrote: »

The emotionless internet confuses me sometimes.

I think a lot of this type of stuff is just passive comment with no real thought behind it. Gutter press headlines spring to mind. Yet these will be the very people marching when their taxes will be increased and their wages adjusted to help with this type of debt. Hows that for smugness!! lol:)

RATM

who the fug wrote: »

What I could never understand about investing in Dubai is why when you when you as a non native have no legal recourse if something goes wrong would you do it.


Ask Mr Al Fayed abut taking a native to court

I remember reading an Irish Times article along the lines of 'Dubai is great but be wary of having no legal recourse' about 4 years back. I can't remember who the journalist was (or how s/he got the story past their editor) but I do remember thinking at the time 'why the hell would you invest in a market where illegal activity has no regulation?'

In hindsight now I'd say every high level trickster around had some kind of scam on the go in Dubai and this story is only the tip of a rapidly melting iceberg in the Arabian Sea.

RATM

smccarrick wrote: »

Its not unusual to limit the rights of foreigners to own property in a sovereign state- the majority of EU countries have similar restrictions, and for an extreme example- look at Switzerland.........

Tell us more

badinfleunce

Here is some info on Switzerland I found regarding ownership

http://switzerland.isyours.com/e/VA/VacProFAQ1.htm#laws

In Dubai similar restrictions apply with regard to visa etc and most expats now go across the border into Oman to renew their visa every 3 months.

Freehold Ownership is fine, leasehold is fine, and buying restrictions are fine, once they are clear, but ripping people off and getting away with it is not fine and now the Irish tax payer is footing the bill for the lack of action by the Dubai system to prosecute realestate companies for not honouring their contracts. I get the distinct impression, because the Sheiks own most of the land and the real estate companies, that they are part of the problem as they are set to loose millions if they return deposits on projects that are completly sold out and where the banks have pulled the plug on the finance. As we all know Dubai's economy is falling quicker than a lot of other countries ecomonies. Their exposure in property is huge and the banks are now calling the loans in.

The only winners in all of this is the banks across the board and across the world. The capitalist system isnt working, if it was the banks would have fallen and another investor would have seized the opportunity to establish a banking system based on value, trust and solid lending policies, learning from the mistakes of the past and developing a system and structure to never allow a business so big and powerful as a bank to fail again.

Instead the Irish Taxpayer is bailing out the banks for their inability to control their lending and stick to their policies and guidelines. They will continue with the same system in place and the same people running them and they will not change and no laws are being put in place for any change. Once nama is in place you will see the banks increasing charges and interest rates giving the tax payer a double whammy (paying higher taxes to fund Nama and paying higher bank charges to get the banks back to profit). Why are we sitting down taking this? Its beyond me .... but one thing is clear... the Celtic Tiger ruined the Irish culture and the Wealth ruined the fight in the tiger. Any other country at this point would be up in arms, out on the streets and ensuing a revolution.