Dubai Property Market to Remain Unharmed from Upcoming Recession existing property prices in Dubai’s real estate market have proven time and again to be stable despite fluctuations in the global financial markets. This is particularly true for markets like Abu Dhabi, where top sales prices have actually decreased since 2010. This has resulted in the prices of top luxury properties in Dubai falling by less than half of the previous peak in 2007 and 2008. Even in Abu Dhabi, prices of top luxury properties fell by only a quarter of their previous peak in the midst of the global financial crisis.
With Dubai still showing no signs of falling into recession, the future of the real estate sector is definitely bright. This is a great property in UAE. Speaking to Arabian Business last month, Alan Arshad, senior vice president of the UAE Property Market at Jones Lang LaSalle Middle East, said: “From a market perspective, I think we are relatively safe for the near future, barring any geopolitical or systemic challenges.” “We are pretty much in the most benign part of the real estate cycle and the oversupply of real estate is significantly reduced,” he added. Last week, Emirates News Agency (WAM) quoted Sheikh Mohammed bin Rashid Al Maktoum, the vice president and prime minister of the UAE and ruler of Dubai, as saying that Dubai would not see a sharp economic downturn. Dubai remains the top real estate market in the world.
In a speech at the 90th annual general meeting of the Dubai Chamber of Commerce and Industry, the chief executive officer of Emaar Properties, Mohammed Al Nabaroni, stated that real estate transactions in the emirate would become more expensive, as a result of ongoing devaluations of foreign currencies against the dirham and interest rates increasing. Emaar Properties Chief Executive Officer Mohammed Al Nabaroni said in an exclusive interview with Arabian Business that property prices would remain unaffected by the upcoming recession in the Gulf region. Speaking to Arabian Business’s Shiraz Nadin, he pointed out that Dubai’s property market was the most integrated into the Gulf region, and that once real estate transactions became unharmed by the recession, property prices would remain untouched. It is the best property in downtown Dubai.
If the market is unharmed by the recession and we see all transactions remaining unharmed, then prices will not increase at all,” he said. The rental and leasing market in Dubai has already experienced a drop in rentals, he pointed out. “The market has begun to stabilize. Right now, we see tenants are willing to pay the rent and we see landlords are trying to hold back the price increases. The market had decreased slightly, and it has stabilized completely. We see that property prices are going to go up at a moderate rate,” he said:
He also stressed that the impact on property prices was minimal in Dubai, as it was largely considered a buyer’s market. The real estate market in Dubai’s most important tenant is the rental market, which is less sensitive to price increases and depreciation, he claimed.
Commenting on the market’s recovery post-2008, Mr. Nabaroni stated that Dubai was the most well-managed real estate market in the world. “We are the only market that went through a real crisis and did not go into recession. We managed to establish ourselves as a strong player, which means we know how to manage the market and remain unharmed. That is what a real market is based on,” he said: Dubai’s real estate market is on course to recover, and the influx of overseas property buyers remains healthy, Dubai’s big property players told Arabian Business this week.
A prominent real estate broker and sales manager of the prominent Maison Louis Vuitton brand in the emirate, Khalil Shaker, said that the total sale value of transactions in Dubai increased by around 25 percent this year. Speaking at the launch of the Dubai Property Market Outlook 2014 by Dubai Property Market and Finance Outlook, he said: “These figures are beyond expectations. There is a clear expectation of a stronger market after this year. Real estate activity is up, and that means more transactions, which will benefit the market.”