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In my opinion the real estate market in general will remain stable pretty much throughout the year and perhaps will start showing an upward trend towards the end of the year.
It largely depends on how the international economy and markets are going to behave. Real estate in UAE will only be lucrative if the markets around the world start picking up and people are able to generate investment funds.
All in all, as I have mentioned a numerous times before, we are looking at a long-term approach. According to recent reports the market has bottomed out and is likely to go up from here onwards. We have better rules and regulations in place and shopping around, trying to find great deals below the market rate will be the key to success for any investor in 2011.
In one way you are right but as I feel the rent is coming down further, and since the new projects are in the stage of near completion, pockets would be created in different areas according to the demand and price. Therefore the market did not hit the bottom yet.
The price of a land or a built property or boom in real estate market is always directly proportional to the healthy business activities in that particular region. Dubai was considered a central hub for UAE regarding economical growth but after a massive hit, overall real estate market in the UAE could not save it from bad influence that happened in Dubai with property business. Although Abu Dhabi is doing very well but there is another competitor i.e Qatar residing in the region, where massive economical activities are attracting the real estate investors.
Vinu, what you are saying makes sense, certain areas might see a further decline but the point remains, if we start seeing an upward trend in some areas then the wave spreads to other areas and generally the property prices will remain stable overall.
For e.g. If property prices in Marina start increasing then that would create a demand in JLT as people will still be looking for bargains which are no longer available in Marina. So the demand in JLT is a little higher now and when investors start seeing an upward trend, panic sets in and instead of genuine home buyers we now have investors pumping in the money. This means that the equation gets out of hand in terms of supply and demand. The gist is when will these investors start pouring in?
According to Credit Suisse, the market will revive in 2011 as the economic condition is improving. You can read the report here:
I also believe in the revival of Dubai real estate in next year. Dubai is never a bad option for long term investment. Although, in previous few years, market has bottomed out but now it is getting stabled in few sectors.
Dubai government and private sector are continuously making efforts to start the halted projects, to invite the foreign investors, to present new developments in the region to attract the investment again. Now it depends upon the credit companies and banks to stabilize themselves soon to provide credit to customers to enhance their purchasing power.
Government must be having some strong plans to stabilize its main attraction and bring boom again soon.
What I would like to say is that UAE real estate market faced a tough time previously and after that the government started taking steps to revive the market. The UAE government and financial institutions there are now using a pro-active approach and have done a lot of planning to handle any such situation in future as well.
So, the real estate market of UAE will definitely perform better and even if it shows a decline, it would be a short-term decline followed by quick improvement. So, I agree with Mr. Zeeshan that the UAE real estate market will remain stable in 2011.
Quite true. In long term it should be better just like whole other segments, IT, JOB etc. But let us not forget current investors who lost millions on sites, projects, building and didn't get a single penny back. Do u think that they will wait for a long term return?
Furthermore consider the number of people and number of infrastructures and yet there are so many infrastructures to be completed. Some are ready to move in but left vacant, and some are left just empty. Even any villas and many compounds are vacant. Who is going to fill them up? Expatriates don't stay here much long. Moreover many landlord doesn't want to leave their buildings empty.
Some of them I dealt with say "Even if just one unit remains empty for long it cost us huge percentage". Therefore they are ready to negotiate. This is the market for buyers and tenants. So, whatever the price they are demanding we must approve.
I do agree that at the moment its a buyers market and they are pretty much dictating the market trends. That is precisely the reason to invest now as there are many great deals available out there in the market.
Having said that the sentiments towards Dubai Real Estate are gradually changing in the positive sense and distress sales are difficult to find which indicates that the prices should either remain stable or increase a little over the course of the next two years.
Anyhow, all other economic parameters like inflation, annual GDP, trade sector, stock market etc must also be studied to draw a better prediction of the fate of the Dubai real estate market.
Enjoying this handy discussion, according to my observation a most precious property loses its worth when no one want to reside in. Tax free environment for the investors and other facilities made Dubai a business and style icon in the world hence businessmen came here and brought handsome jobs with them. The need of apartments, offices, homes lifted the real estate market so high so until other business activities don't go remarkable here, there is no chance in the recovery of property prices.