2012 could be year for dubai recovery
News Posted On: 02 January 2012
According to the Dubai Land Department real estate transactions in the emirate were up 20% in 2011 compared to 2010. Sultan Butti bin Mejrin, director general of the Land Department said that the "quantity, quality and procedures reflect the recovery and growth of the real estate market in Dubai" and that he expects to see a "strong recovery" in 2012.
I have written probably dozens of articles pouring cold water on such claims since the market crashed in late 2008. But this time there is a chance that Dubai could recover in 2012. Prices are down by an average 50% since the market peak, according to some indices and reports prices in some areas and sectors are down by as much as 70%. There is a consensus that this is far enough for the market to find bottom, or rather that prices can't really fall much further.
While it has crashed harder than most, this is mostly because it shone brighter and boomed bigger than most as well. And one of the main reasons for this was developers' penchant for unconventional and/or glamorous properties. Dubai had razzmatazz aplenty. Sure, this left many developers with egg on their faces for overstretching themselves, like master developer Nakheel that was still building the world's tallest skyscraper as it scrambled to restructure its unpayable debts, but it has also given Dubai some of the finest quality real estate in the world.
Top quality real estate at such low prices, you have to ask why wouldn't investors be attracted. According to the Land Department they are indeed being drawn once again, but now they are not being drawn into speculative investments, they are investing in the long term success of a more mature Dubai property market.
The main problem for private-level investors is Dubai's landscape of unfinished developments, and its bad reputation for unscrupulous developers. The first one will resolve itself as investment grows but the second one could certainly do with some heavy government regulation to increase confidence. On the other hand, while Dubai property market may have matured so have private investors. While before the crunch people would buy on the basis of strong beliefs and wowing presentations, but now most are doing extensive due-diligence and research. I am gonna sit on the fence and simply say that there is certainly a chance of a turnaround in Dubai this year.
View UAE property for sale
Written by Liam Bailey
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