According to reports, Dubai property prices have reached a bottom, following highs in the summer of 2008. Prices have fallen as a result of the global market, and Dubai. It is still very much a developing country, has suffered especially badly. Real Estate Developers in Dubai was heavily reliant on foreign investment. Thus it has suffered, causing property prices to plummet, with drops of up to 60% not rare, and negative press reporting on a mass exodus of residents.
With many properties still trading at 2005 levels, many investors are rekindling their interest in property projects in the UAE. It is where rental returns are very high, with returns of up to 7% not rare and double digits on particular properties. Residents who had previously been priced out of previously unaffordable properties are now buying, causing a mini-boom.
The off-plan market
The off-plan market is also struggling because it is heavily credit-funded, and it will continue to be very inactive until the global financial economy improves. There has been very little activity in this area of the real estate market.
The government also announced a $20 billion cash injection into the local banking system, which is helping to restore confidence. This, combined with the relaxation of residency visa requirements, is providing a much-needed boost. We believe that this would help to raise real estate prices, which we believe have reached their lowest point.
A vast number of investors are taking advantage of these all-time low prices. While an even larger number are hoping for further drops. It is very much a gamble and full speculation as to when prices will turn around; those who get it right will have made a big financial gain, while those who don’t will be very disappointed.
We’ve seen increased activity in 2009, and with many people still taking a cautious approach. We think the economy will once again provide fantastic investment opportunities.
Finally, recent investment reports into the Dubai Investment Real Estate have suggested that prices in regions such as Jumeirah Lake Towers, Dubai Marina, and the Business and Financial Districts have jumped by 7-9 percent.
Many analysts think the market will rebound quickly and become a safe haven for property investors once again.
PROPERTY DELIVERIES IN DUBAI AREN’T HELPING THE MARKET
With the collapse of the Dubai Investment Real Estate in 2008, many property developments were halted, with a number of projects being cancelled, as was widely reported in the media. Property developers are now focusing on completing real estate projects in order to meet the obligations made by investors. Who in some cases paid substantial sums of money in advance of the construction stages.
With more favourable conditions from banks and pressure from property investors. The market is at risk of experiencing property oversupply, with many investors looking to flip properties. But it is never intending to live in the emirate. Property investors looking to cash in on the asset are offering more homes for sale, according to most agents.
Because of the dense population, central properties continue to be attractive to prospective homeowners and landlords looking for rental properties. Many property speculators who purchased at the peak in 2007 and 2008 are getting a rude awakening when it comes to valuations. And many haven’t gotten the return they expected, if they can be sold at all, depending on the location.
Off Plan Properties in Dubai
While properties in Dubai’s outlying areas may appear to be a good investment at the time of purchase, they are significantly less expensive Off Plan Properties in Dubai than prime areas such as Dubai Marina or Palm Jumeirah, especially given the city’s extensive expansion plans at the time.
Due to the city’s contraction in development and the lack of established public transportation infrastructure. These areas are currently relatively remote, and these properties are not in demand. And these may lie empty or cash-strapped investors may be forced to rent out at very low rental returns. Putting further pressure on rental returns. It remain very favourable at this time towards the tenth percentile.
While it is still thought that outlying areas will be viable long-term investments as the capital grows, attention will be drawn to famous areas. Such as Dubai Marina, Jumeirah Lake Towers, and the business districts. These are all located near the Dubai metro system. While Dubai will continue to attract visitors, the number of new inhabitants would rise dramatically in order to fill vacant properties.
With many properties still trading at 2005 levels, many investors are rekindling their interest in property projects in the UAE. It is where rental returns are very high, with returns of up to 7% not rare and double digits on particular properties. Residents who had previously been priced out of previously unaffordable properties are now buying, causing a mini-boom.
With the collapse of the Dubai Investment Real Estate in 2008, many property developments were halted, with a number of projects being cancelled, as was widely reported in the media. Property developers are now focusing on completing real estate projects in order to meet the obligations made by investors. Who in some cases paid substantial sums of money in advance of the construction stages.
