DUBAI HOUSING PRICES FACING A POSSIBLE FALL
Friday, 10 Oct 2008
At this current moment in time the supply and demand situation for residential property in Dubai is pretty good, however, the price of residential accommodation in Dubai is expected to drop drastically following the surplus of new properties coming into the market within the next year and a half, according to experts within the property industry.
According to the regional direction of Colliers International, Ian Albert, the key factors driving the current market for property in Dubai are firstly that financing for property purchases is easily available, and secondly that the situation for supply and demand is good at the moment. However, the supply of new properties does not quite meet with the demand, and Albert says that this situation will probably remain a problem for the next year and a half.
Another thing that keeps the demand for property in Dubai reasonably healthy is that numerous investors have withdrawn their funds from the stock markets and put them into property markets instead, because of the decline in financial markets in the United Arab Emirates. Of course, the ongoing success of this is largely dependent on the liquidity available.
Developers of property in Dubai are lucky in that the Central Bank in the United Arab Emirates has formed a Dh50 billion pool that developers can loan from to make certain that their projects are able to go ahead and be completed according to schedule. Another factor playing a part in the stimulating for lending is that interest rates have dropped quite drastically, and Albert says that he estimates an abrupt surge in the number of products that are available within the next 18 months. Albert concludes, “When that happens, there may be a short-term fall in prices – less than a year.”
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