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A New Year, a new set of dilemmas for investors on the property forums

As ever Dubai receives a lot of interest. Generally there is agreement that the developers have taken a hit from the credit crunch and are running out of money. The real depth of the issue is hard to tie down as companies are not always willing to reveal their plans or how much they are reining in.

But a key question on the forum is whether a property investor with off plan purchases should sell or not right now. The sensible answer depends on an individual's finances. If rental yields remain strong, and they are stronger in Dubai than in many other markets, then selling is not advised.

However a key concern is the financial situation of the developer. No one really knows when it comes to Dubai if properties are going to be finished on time. As one poster gerogihh points out; 'If you trust your developer that will finish the project on time and is not going to increase the price during the construction keep it. If you have a small doubt that the price is extraordinary or the developer will start playing games sell it.'

But getting that kind of information is not always easily although moves are in place to inject more transparency into the property sector in Dubai with the Real Estate Regulatory Authority announcing a number of new rules, some of which took effect on January 1.

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The problem is that publicly a developer will always deny it has financial problems. But on the forums there can be little doubt that many people believe that developers don't want to go ahead with costly projects in the current economic climate but they don't want to cancel them either, not least because they will lose the deposit money. What will this mean for investors? Well, it may result in developments not being finished on time.

Meanwhile in the UK a big question for property investors going into 2009 is when the market is going to bottom out. It has been widely predicted that prices will continue falling in the first few months then there might be a levelling out and of course cash rich investors don't want to leave it too late before finding bargains.

According to some posters on the forum now is the time to buy as sellers are becoming desperate. But there are always those who sit on the fence and advise doing nothing.

But as Rialto points out; 'If buying a property now for 51k now that would have sold last year for around 95k with a mortgage of  £199 (4.69%) per month at rent at £425 is risky – then I'd like to know what I'm doing wrong?

One area where rental yields may have a good year is in the holiday sector. It is mentioned that a lot more people could end up spending their holidays in the UK this year due to the falling pound.

A property investor reports that he is currently putting in 'silly offers' for properties and they are being accepted. Another reports finalising three cash flow positive deals in one day just before Christmas with two of them rented out almost immediately. She also mentions that new tracker mortgage deals mean that she is £1,200 a month better off. So it is not all bad on the home front.

And even amid the doom and gloom in the US there are positive signs. One poster on the forum reports that the brokerage that he works for has just had its best month even in December. So amid the worry about job losses and industry going under there is still activity in some parts of the property market, but of course, the good news never makes headlines.

Another property investor mentions that in conversation with a title agency office he discovered that their office is dealing with a steady flow of work. So something is moving.

But there are many areas where the real estate sector is suffering with Florida, California and Nevada consistently topping the foreclosure lists. But for some it is not a new phase. TomC, a real estate investor in Ohio, says that a declining auto industry, job losses business closures have been part of life for the last 20 years. Property is very cheap but he reckons that until someone works out how to bring industry back then the market is going to remain 'horrible'.

Regular readers may be interested in an update from Montenegro. From time to time we have mentioned the attempt by a couple to build an eco friendly project in Montenegro on the channel4 homes forum. They are still waiting for planning permission but are optimistic for 2009. Indeed it isn't New Year according to the Orthodox calendar until January 14 so in Montenegro they have still to celebrate.

According to Anke property investment opportunities are still good in Montenegro with the government keen to boost tourism and also work towards becoming a member of the European Union. 'With EU membership projected for 2014, and EU funds allocated to improve infrastructure, the country looks likely to continue the strong 6% GPD growth of recent years,' she reports. But does the country have enough gas?