Redefine News

One look at the newspaper and the worst is confirmed. The Dubai Government has officially stated that it will not bail out DubaiWorld from a US$60 billion debt repayment schedule. This means that the ports and shipping related authority is left on its own to figure out how to restructure the debt repayments to the satisfaction of creditors and other concerned parties.
So what’s the worst that can happen? DubaiWorld could try to sell off its assets to raise money to pay off some of the debt, and even ask the creditors for a further moratorium on the balance to be repaid. At the worst if it is not successful, the company could go bankrupt. While this is not entirely unheard of in a recession, as has happened to the banking and mortgage companies in the USA, the problem here is that it would reflect badly on the DubaiGovernment. Eyebrows will undoubtedly be raised if it is allowed to happen. The truth is that the Dubai Government has stretched itself to the limit on the path of development and is hard pressed to come up with a workable solution.

So it is left to Dubai World alone to find a way out of its present predicament. Notwithstanding that it has been backed by the Government in the past, this time the DubaiGovernment refused to come to its aid. Whatever the outcome, the management of DubaiWorld will learn some very tough lessons as they pass through this ordeal. And so they should. Financial discipline, realistic estimates and a less luxurious lifestyle are some of the lessons to which its executives need to condition themselves.

To my mind, the market has over-reacted to this recent event. Dubai World has not in effect defaulted on the loan. Maybe its own staff or a group of experts such as Deloitte can work out something that will help Dubai World tide over the present time. Staff at this ports authority will need to work hard and make some sacrifices. Some heads might roll without a doubt. But in the end the company and Dubai would be saved.

The mainstays of the Dubai economy, the Dubai Property market, the splendid Dubai Marina property and even furnished apartments Dubai all stand to gain from a resurgence of Dubai’s economy. Similar is the case with the more exclusive Dubai Properties, the Dubai Hotel Apartments and even the Dubai apartments for rent.

The diehards are convinced that if the present crisis is successfully averted, Dubai will bounce back. Employment will increase and the economy will flourish once again.

The news about Dubai’s financial crisis has been travelling around the world faster than the speed of light. And millions of people, both connected and unconnected with Dubai and its markets are making decisions and taking sides even faster than that. It certainly is time to find out that behind all the smoke and mirrors, what is the real truth behind the supposed financial crisis in this fair emirate? For starters, here are a few facts that nobody can deny:

1.Dubai had been experiencing an unprecedented boom in housing, construction and finance for the last six years at least.
2.The appetite for its housing, renting, retailing and a lot of other sectors invariably connected with growth and prosperity also enjoyed the fruits of this growth.
3.The present recessionary trend in the USA has undoubtedly had repercussions all across the world, even affecting the UAE since the last eighteen months or so. Thousands of expatriate workers have had to leave Dubai with the downturn in the housing and finance sectors. Invariably this has slowed down economic activity in other sectors as well.
4.Presently concerns about the ability of Dubai World, a Government entity, to pay back US$60 billion in debt have started a crisis in the emirate. This was exacerbated by the fact that the Dubai Government first appeared to be supporting but later alienating itself from the beleaguered entity.

The mismanagement, rather miscommunication of the whole issue has added to the worries of investors, and the Western media is having a field day fanning all sorts of rumors that Dubai could be the epicenter of another financial fiasco. With Dubai World losing the support of its Government, it was left to the corporate entity to respond and lift itself out of the abyss of rumor and conjecture. In fact it’s quite typical of the Arab world to have a laid back attitude and say ‘Inshallah’ rather than strive to work itself out of difficulty. To its credit, Dubai World has lost no time in doing so and called a panel of experts from Deloitte to assist. What ultimately transpired was that Dubai World will be asking for a restructuring of US$26 billion of debt largely pertaining to two of its subsidiaries-Limitless and Nakheel- at a creditors meeting scheduled for next week. The moratorium will be for six months.

In the backdrop of all this, business activity in Dubai has slowed down but has not stopped altogether. There are still apartments for rent in Dubai at reasonable rates. In fact, many living on the edge have moved up to take advantage of better facilities at affordable rents especially when it comes to apartments in Dubai. Other investors have sought to Buy Villas in Dubai at almost throwaway prices. Indeed some of the Dubai Marina Apartments have also been selling at bargain prices. With the Dubai and Abu Dhabi markets in free fall over the last few sessions, a correction in perception is certainly awaited and necessary.

So! You’re about to embark in what most Pinoys dream about – buying your first home! Now, put down that checkbook because there is something every home buyer has to do before they push thru with the transaction: the ocular inspection, or simply put – what we call in the Philippines “tripping.”

Trivia: did you know 49% of homeowners experience a problem with the houses they’ve bought simply because they didn’t spend enough time researching or checking out the property?

But you won’t be part of the 49% now will you? Yes you won’t because here are some tips we encourage you to follow when making your first tripping/viewing schedule to your possible (dream) house:

Do a background research on the property – including the area surrounding it. This will save you time from viewing a property that won’t address your requirements.

Bring a camera and take photos of the houses, carefully taking a close-up shot of the house number so you can recall easier what house you visited.
Visit during the daytime, as problems will be better seen that way.

Don't be afraid to ask - about the fixtures, fittings, association due, noise level, water supply, restrictions, etc. What you don't know can and may hurt you. This is your money we're talking about.

Brokers are only human - do not expect them to show you all the houses you want in a short span of time. They are also not public servants and only earn commission. Put yourself in their shoes, and keep your expectations realistic. Also, be open with your broker if they offer free transportation or would rather meet up somewhere in between.

Remember, what you do to others will come back to either haunt you or bless you.

Bring a check book with you – especially if you’re really keen on getting the property, as most brokers or home sellers prefer that you make a deposit to reserve the property. Although this is not always the case, as most first time buyer visit a single property several times.

Be on time! Let’s get rid of the Filipino habit of tardiness. It won’t do you any good and can possible turn off a seller. Remember it’s not just a buyer’s market, it’s also a seller’s market.

Don’t ask for the owner or tenant’s contact details. This is being totally rude to your broker or agent. If the owner offers, politely accept but return it to your broker/agent. This will ensure the trust and confidence between the 2 parties.
The more information you have about the house, the better. Spend as much time as you want exploring & poking around the house (as long as you have permission to do so!). Remember, "Buy in haste, repent at leisure."