Archive for October, 2008

Dubai real estate

20/10/2008

I have been consistently wrong about property in Dubai. Mrs Saul has been consistently right. Fortunately, as we are a team and she is team captain, we bought a property.

Owning our own property has insulated us from the problems lots of our friends have had, namely having to leave their villas or apartments, or being forced to accept huge increases in the rent they have to pay. On the flipside, lovely though our apartment is, we have had to deal with increases in service fees and frustrating quality issues. It is not only costing us far more to live here compared to our last place, it’s costing us far more than we had expected. When you’re promised 8Dhs per square foot in 2004 you budget accordingly and add some room for increases. When 2008 comes around and you’re made to pay 35Dhs per square foot, plus 10,000Dhs a year for a municipality tax noone told you about, your costs go up more than you had planned for.

Not that we’d be better off if we’d stayed where we were – all the parking has disappeared and three new towers have been built right next to our old building. What used to combine the advantages of living in a modern tower with a quiet neighbourhood and plenty of space has now become more crowded and, in my opinion, far less desirable a place to live. We’d be saving money, but would be cramped and miserable.

The articles mention problems with supply and demand in Dubai, yet there appear to be hundreds of empty apartments in most of the new developments. I can’t work out why this is – are they owned by investors, simply waiting to sell them on? Are they owned by people in neighbouring countries who need a bolthole should Sarah Palin decide to drop a moose on Iran?

I think part of the reason may be a general desire among landlords to leave a property empty rather than reduce the rental price. In London, I’d expect rents to go up and down, based on supply and demand. Most buy-to-let landlords have mortgages to pay, so have to accept a tenant at some point, even if the price isn’t as high as they’d like. I presume people who’ve paid for these apartments outright in cash simply have no pressure to get tenants in if they don’t like the price.

Another contributing factor seems to be the willingness of certain companies to pay whatever it costs to get top staff over here. That willingness generally raises prices. There seem to be two tiers of new arrivals from Europe at the moment. Top level blue chip types who get paid the full expat-whack and are plonked into lovely apartments paid for by their companies. The other group is single people, as their employers can’t afford to fund housing costs for families, who were living five to a house in London and are happy to do so in Dubai in return for the fun of living here and the chance to move up the job ladder more quickly. Are the latter group financially better off for moving over, as I was when I came here? I doubt it. Still, come they do.

Talk of supply and demand is also distorted by what’s actually available. Whilst lots of units are coming on line, are they something that people can actually afford to rent or buy and are they something potential tenants actually want to live in? How many families really want to live in an apartment on the 55th floor? How many can afford to? Two or three bedroom apartments abound, but if I had children, I’d be far happier in a low rise such as ours, or in a villa. This seems to explain why many apartments appear to be empty whilst rental prices for villas have gone through the roof. Mr Aaron’s place is lovely, but Mr Aaron is too much bachelor. If you’re a couple with a young child, you might manage, but as kids get older or more children arrive, you’d want to be somewhere ‘normal’. Well, I would at least, but maybe I’m not the target customer.

Who are the target customers? Dubai recently hosted Cityscape, a huge property tradeshow. All the adverts are aimed at ‘living the luxury’ and ‘living the dream’. I find this kind of advertising leaves me completely cold. Talking about luxury is all very well, but is pointless if I can’t afford it. Whether I were buying a place to live in myself or 50 units to rent out, I’d be more interested in concepts such as ‘affordable living’, a track record of delivering on time, guaranteed low services fees, guaranteed parking and decent road access.

I have no idea how people can afford to buy where we live now. I have no idea how people are managing to rent here either. Prices have gone through the roof. Even if house prices fall by 10% in 2010, as predicted, that’s a minimal drop when compared to how much they’ve risen in recent times. The increase in value is all very well for us, but it doesn’t mean we can sell our place, cash our money in and rent somewhere for a few years – there’s no guarantee we’d find somewhere that wouldn’t eat up any profit we’d made, or that would charge a steady rent that would allow us to budget properly.

The government is taking some excellent steps to stop some of the crazier aspects of the property business here. There’s a new regulatory body and ‘flipping’ property is being clamped down on.

As with all things in Dubai, we’ll just have to wait and see how things pan out. It’ll be very interesting to see what things are like in five years’ time. I’m sure Mrs Saul’s judgement will stay spot on.

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New pics up

19/10/2008

I have posted my photos from my India trip in August here.
They are not meant to be photographic masterpieces – it’s just what I saw when Mr Baiju was whizzing me through the traffic in our Corolla.

Business Genius at work

19/10/2008

I’m finding the business strategies of our two local supermarkets confusing.
One of them is a premium type place – rather like Waitrose. The other is more of a convenience store operation.
I’ve mentioned the convenience store before. Its strategy is to have exactly the same opening hours as the premium supermarket, whilst maintaining prices that are 100% higher than its competition. Currently its only saving grace is that it delivers for free. Since it’s usually shut when we need it and twice the price, we stay away.
The premium supermarket’s current strategy seem to be not to have popular items in stock. Organic oatcakes are available in abundance, but more popular items aren’t. I had a fun conversation with the manager about this this morning.
Chris: Is it possible to make requests for certain items to be in stock?
Manager: Yes sir.
C: The Times newspaper always sells out very quickly. Can you order some more?
M: It’s very popular, sir.
C: I know. I expect that’s why it’s always run out. Can you order some more copies?
M: The copies sell very quickly. It’s very popular.
This conversation went on for about 5 minutes, until we reached an agreement – the manager would ask for more stock.
We then moved onto another product.
C: Would it be possible to keep soda water in stock? You haven’t had any for three weeks.
M: It’s very popular, sir.
C: I know. I expect that’s why it’s always run out. Can you order some more stock so that you don’t run out?
M: The soda water sells very quickly. It’s very popular.
This conversation also went on for a while, as did the final topic – diet ginger ale, also a best seller.
I’ve never run a supermarket, or indeed any kind of retail outlet, so I can’t really criticise, but is it not normal to keep popular items in stock so that you can sell lots of them and make lots of money?

Cockroaches with your meal, sir?

19/10/2008

I made it back from Algiers three hours late, getting home at about 0430 on Friday morning.

Highlights of the trip were cockroaches crawling around the galley area and the stewardess dropping the cloth she was using to handle the food, picking it up from the floor and carrying on using it. I didn’t eat.

When I pointed the cockroaches out, a steward thanked me, squashed them with his foot and left the resulting squished insects on the floor for the remaining three hours of the trip. I will be doing my best to use an alternative carrier in future.

Speed up, slow down

15/10/2008

I was interested to read this article, which states that the speed limit on the Dubai-Al Ain road will be reduced from 160Km to 80Km.

It used to be 120Km, but was raised after people complained they were getting speeding tickets. Now it appears to have swung right down again.

My feeling is that 80Km is too low. You’ll have a mix of people ignoring it completely, regardless of radars, coupled with people driving at the speed limit. A return to 120Km, combined with a police presence, enforcing proper driving standards at any speed, would be welcome. Driving to Al Ain at 80Km would mean three hours of mind-numbing pootling along in a straight line on an often near empty road. Without cruise control, it’d take a strong will not to find your speed creeping up and up.

When the speed limit on Sheikh Zayed Rd was reduced to 100Km, I welcomed it, predicted problems for a while, followed by acceptance and a safer road. We definitely have a safer road now. I can hardly believe that we all used to race along at 120Km, with the usual nutters whizzing by on the hard shoulder at 160Km. That said, a lot of the more dangerous driving occurs during rush hour, when people are moving at way below the speed limit, but are either driving in the wrong lane at the wrong speed, cutting in and out of lanes, not using their indicators, pushing in, etc. These guys deserve a strong police presence.

Speed up, slow down

15/10/2008

I was interested to read this article, which states that the speed limit on the Dubai-Al Ain road will be reduced from 160Km to 80Km.

It used to be 120Km, but was raised after people complained they were getting speeding tickets. Now it appears to have swung right down again.

My feeling is that 80Km is too low. You’ll have a mix of people ignoring it completely, regardless of radars, coupled with people driving at the speed limit. A return to 120Km, combined with a police presence, enforcing proper driving standards at any speed, would be welcome. Driving to Al Ain at 80Km would mean three hours of mind-numbing pootling along in a straight line on an often near empty road. Without cruise control, it’d take a strong will not to find your speed creeping up and up.

When the speed limit on Sheikh Zayed Rd was reduced to 100Km, I welcomed it, predicted problems for a while, followed by acceptance and a safer road. We definitely have a safer road now. I can hardly believe that we all used to race along at 120Km, with the usual nutters whizzing by on the hard shoulder at 160Km. That said, a lot of the more dangerous driving occurs during rush hour, when people are moving at way below the speed limit, but are either driving in the wrong lane at the wrong speed, cutting in and out of lanes, not using their indicators, pushing in, etc. These guys deserve a strong police presence.

Mac bother

15/10/2008

Bother! No sooner do I get my lovely MacBook, than Apple release a new range.

Instantly my old black Mac will start to look hideous and deformed in my eyes, whilst colleagues in the Sun office gloat over their new models, just after their old Toshibas mysteriously start breaking en masse.

Apple’s ability to make their older models look completely dated each time a new version comes out is simply amazing.

Jamie’s school dinners

14/10/2008

I’m three years late watching ‘Jamie’s School Dinners’, but have finally got around to it. When it first came out I remember reading the reviews, but nothing prepared me for what’s in the actual programmes. (Jamie Oliver is a young British celebrity chef. In the series he sets out to get British kids to have healthier meals at school).

The kids in the schools he’s trying to help are literally being poisoned every day – all they eat is complete and utter junk, day in, day out. The alternative school meals that Jamie prepares all look good to me – I’d have eaten them when I was at school. The pupils simply won’t touch them though!

Some things that particularly struck me –

– Jamie’s constant effing and blinding isn’t necessary. He comes across as earnest, but a bit of a twit who swears pointlessly.

– If he wants to persuade them to eat better, he should focus on the health aspects. Tell the girls they’ll get fat and they’ll switch pretty quickly. Tell the boys about the kids in the local hospital literally vomiting their own faeces after months of junk builds up inside them and they’d switch as well. This persuasive stuff doesn’t seem to be put to the children – he doesn’t sell it to them.

– The children won’t even eat curry and rice – they’re totally addicted to complete rubbish.

– All the children in the school in Greenwich school he’s at seem to speak the same faux Jamaican patois, regardless of their background, do you know what I mean man, innit?

– Some of the kids can’t even recognise common vegetables. They think leeks are onions.

– Parents are amazed when their children behave better when they’re not fed caffeine filled, sugary drinks.

Incredible stuff.

UAE Banks protected

13/10/2008

This news is welcome. Guaranteeing the deposits of banks in the UAE puts my mind at rest, for the moment. I dread to think how you’d actually get your money back in the event of a bank failing though.

My vast wealth can reside with my bank here for the time being. We were on the verge of raiding every local ATM and using the cash to fill my failing mattress.

In other banking news, a friend of ours told me recently that his mortgage is collected by monthly direct debit by his local mortgage company. I had to write 72 cheques for my monthly payments, with the difference apparently being totted up every two years, followed by either a refund or my paying the extra. Not particularly clear or efficient for either party.

False travelling economies

13/10/2008

Today’s trip to Algiers has to be the most miserable journey I’ve had to undertake when working at Sun.

I had the choice of two carriers and chose the one I thought would be more convenient – nicer arrival time back on Thursday, fewer stopovers, cheaper for Sun, etc.

I got to the airport at midnight, only to be told that the plane would be late. I was given varying information on how late it would be, so decided to stay at the airport, rather than go home to sleep for a bit. In the end, after a nightmare checkin and boarding, we left at 0800, five hours late. Thankfully, the gentleman from the airline managing the checkin process took pity on a poor Englishman and bumped me up to Business Class. This made a world of difference, the principal advantage being that I was able to sleep and I had the use of a toilet on the plane that wasn’t awash with water and still had some toilet paper. And a working toilet seat.

On the plus side, the passenger mix was one I’m not used to at all, so I got to see some new faces. A lot of the passengers were en route to Niger and other countries in French speaking Africa. One African chap was wearing what I, in my general ignorance, would describe as a wraparound, Touareg style, headdress. The picture here doesn’t really do it justice, but it was this kind of thing. It looked quite cool.

Passport control was rather slow, but I did have a good chat with the immigration officer about which languages people learn at school in Algeria and the UK whilst he tidied up my bad handwriting on the immigration form. Apologies to the people behind me in the queue. I promise to fill the form in more clearly next time if you promise not to smoke and spit phlegm on the floor next to my luggage.

When I arrived at my hotel, there was no booking for me, but I managed to get a room.

I’m going to ask my travel agent if I can be booked on a business class seat when flying back. I generally don’t mind slumming it and economy is usually fine for most of the routes I do, but this one was really rather tough. Once everyone’s seated things tend to be ok, but getting to that stage can somewhat trying.

I’m hoping that I’ll be home to Mrs Saul on time on Friday morning.

If I come back with a successful meeting in the bag and a smiling customer and partner, that’ll make it all the more worth it. Let’s see.