Dubai Real Estate Prices Face Price Drops in 2009
The petro dollar rich country of Dubai has been on an incredible growth cycle. The combination of it arriving as an international destination and the wealth emanating from the region as oil prices surge has allowed Dubai to build some amazing real estate developments.
But like all parties and markets, it has to cycle on occasion. With oil prices at their peak and a tremendous amount of housing inventory coming on the market, Dubai’s housing inventory may start losing value.
But do not cry for those living there. Just this past year prices have appreciated by nearly 20 percent, so whatever losses that occur will have been made in the past 12 months.
As we near the end of our boom and bust cycle in the United States it will be interesting to see what lessons they have learned from it in Dubai going forward.
In an in-depth study, the bank said the softening would result in a cumulative price decline of 15-20 per cent by 2011.
“At the same time, continued supply delays could push forward the year of supply peaking to 2010 and thus extend the cycle further.”
More than half of the 70,000 residential units entering the market in 2009 “consists of as-of-yet undelivered supply” that has spilled over from 2007 and 2008.
“However, we also believe that external dynamics such as negative sentiment, a potential transfer of liquidity from the real estate to equity markets and a reduction in foreign demand could accelerate the pace and timing of a price correction,” analysts at the bank said. Khaleej Times Online
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Pingback by Dubai Property Prices Falling | Property Investment on 10 November 2008:
[...] not news that Dubai’s property market is expected to experience corrections next year and according to Morgan Stanley gradually decline by up to 10 percent by 2010. However, a [...]
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