HAS FINANCIAL CRISIS EFFECT DUBAI REAL ESTATE MARKET

By shaye • August 28th, 2010

With global press stating that Dubai is not immune to the World’s financial issues and its Real estate/ property market, what do we think is happening? Dubai has been a safe haven for many years for investors offering fantastic returns of 40% plus per annum and in recent years has attracted clients who have been trying to get on the investment ladder. Today the property market is starting to see these individuals experience problems. We have had individuals approach us within a few weeks of purchasing an off plan property paying only 10% deposit and asking “how much would I get for it “?

These investors are putting these properties on the market and they are categorized as distressed sales. The major developers in the region very much saw this as a key market with every quotation giving projections on how much your property would be worth in 6months / 12months time, often significantly before its construction date, not very often would this be sold and marketed as an ideal home and location to bring up your children, these would be property millionaires and these smaller investors are now not entering the market for the moment due to very much their own credit lines. But the property market in Dubai is entering a new phase with people wanting to actually live there properties are now being delivered for the end user and in itself is driving a demand.

Also a new investor will be shortly arriving on the scene not the off plan investor but the buy to let investor who will again fuel the market. Dubai is still short of homes for people to live in and the mortgage market is in infancy. Residential visas have to be place to obtain a good mortgage percentage so people need to rent, we see a real boom in this market. The creation of Dubai land is in its infancy and the business districts are starting to appear, the people who work in Dubai will want to live there so we are seeing for the first time the demand for the end user someone who wants to

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have Dubai as their home and not investors who want to use Dubai as a means of quick investment.

So look out – Dubai is not a property market that is due to burst but a property and real estate market just about to re-invest it.

MIRZA M. USMAN AZIZ (IQRA UNIVERSITY).

 

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