Dubai real estate correction 'very close'

VERY CLOSE: Maratheftis said a correction in Dubai's real estate market is imminent, but that people should see it as an investment opportunity. (Getty Images)

Dubai real estate prices are “very close” to a correction, but investors should view a slowdown in the market as a buying opportunity, the regional head of research at Standard Chartered has said.

“I think we’re very close to this being over, I don’t think it’s a healthy situation,” Marios Maratheftis told Arabian Business in an interview.

“The fundamentals are positive but doubling your money in one or two months is not just driven by fundamentals, it’s driven by market psychology and excessive speculation, which is not healthy.”

Going forward, a deceleration in growth will be inevitable, especially as the global economy grinds to a halt.

“Doubling your money in a couple of year is not going to be as easy,” he said.

“The global economy has seen the strongest growth in more than thirty years... and this is changing, so it’s not going to be as easy.”

But he added that investors who take a long-term view can still make a profit.

“When there is a correction people get to carried away with risk aversion and negativity, they never acknowledge and realize the opportunities,” Maratheftis said.

Concerns have been growing over the last few months that Dubai's real estate market could see a significant price correction in the next year or two as large quantities of housing supply flood the market.

Egyptian investment bank EFG-Hermes said in a report last week that property prices in Dubai are set to slump by as much as 20 percent by 2011 from their peak in the first half of 2009 as housing supply begins to outstrip demand in the emirate.

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