PROPERTY IN DUBAI TO INCREASE IN PRICE NEXT YEAR
Monday, 01 Sep 2008
According to a number of research companies and banks, the prices of property in Dubai is set to go up next year by around 35%, and is only expected to drop again in the year 2009, to between 8 to 10%. One company says that already, the price to purchase both commercial and residential accommodation in Dubai has gone up by the substantial amount of 40%.
The Dubai property market has been doing well so far this year, according to the Al Mal Capital Dubai real estate price index, although the market is expected to slack off a little by the end of 2008. One of the reasons for this expected drop in the market is the rise of the US dollar, which could remove some foreign investors from the market as they would then be unable to make a quick profit when purchasing property in the region. So while it will slow the property market down, some experts think that it will be a good thing for the property market in Dubai, in the long run.
Al Mal is reasonably positive on the subject, but investment bank Morgan Stanley is not quite as optimistic and a short time ago released a statement saying that the market for property in Dubai would decline by 10% before the end of 2010. The bank says that this is due to the property supply being far more than the demand for property in the region.
The price index released by Morgan Stanley states that the prices of property in Dubai has risen by 25% in the first six months of 2008, and are 79% higher than prices were at the start of 2007. The index also says: “Prices have been driven by a combination of genuine demand, speculation and, most recently, escalating construction costs. For 2009, we expect prices to start coming under pressure as oversupply becomes evident. We forecast a 10-percent decline between 2008 and 2010 in our base case.”
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