The chairman of Emaar Properties is claiming that property prices in Dubai have bottomed out, and are already starting to show signs of recovery due to investors looking for a safe haven.
According to the report in Arabianbusiness.com, Dubai is benefiting from political turmoil elsewhere, with villa and apartment prices showing signs of stabilising, and they are now beginning to hold their value. There have been less than 1,700 real estate deals so far this year compared to 5,363 during the height of the boom in 2008. However this latest data does represent a 37% increase in comparison with the number of transactions in 2009 when the financial crisis was at its peak. This suggests a slow recovery may be underway, aided by the Arab Spring unrest. Emaar Properties chairman, Mohamed Alabbar doesn't believe the property market will be significantly affected by the current Eurozone crisis.
The property boom in Dubai first began in 2002 when foreign investors were finally allowed Freehold ownership rights at certain developments, and by 2007 and 2008 prices had increased by nearly 80% and prices plummeted by up to 60%. In September Jones Lang LaSalle reported house prices showing signs of recovery, especially in prime projects, but there are still concerns about the number of new homes scheduled for completion by the end of 2012 and worries this could increase downward pressure on prices and rental yields. It's estimated another 33,000 new homes will be completed by the end of next year.
In spite of these problems developers are becoming more optimistic and believe certain areas will see price increases next year, especially as some consider property to be undervalued. They point out that credit to real estate hasn't increased during the last few years, making the market more stable.