75% would not invest in Gulf real estate sector

WAIT AND SEE: Many respondents to our online poll said they were cautious about investing in real estate markets across the Gulf. (Getty Images)

Cityscape Dubai may have broken all records for visitor numbers this year but the results of an Arabian Business poll suggests widespread pessimism still exists about the Gulf real estate market.

The property show attracted more than 70,000 visitors over four days earlier this week and organisers were forced to extend opening hours in a bid to meet customer demand.

Billions of dirhams of real estate business deals were signed during the show but 75 percent of Arabian Business readers said they would not put pen to paper to buy property at the moment.

Their views came as a Colliers International report predicted that house prices in Dubai are expected to remain flat until 2010 following five years of sharp gains.

Around 140,000 new homes in Dubai are expected to be completed by 2010, adding to an existing stock of around 300,000 units the real estate broker's report said.

And with that in mind, three quarters of respondents to our online poll - which ran during Cityscape - indicated that it was the wrong time to enter the Gulf real estate market.

Of those, 51 percent through the global slowdown, which has crippled property sectors in the US and UK, would soon have a "big impact" on the Gulf region, meaning any investment would not be wise.

A further 24 percent said they were adopting a "wait and see" policy because so much uncertainty surrounded the global and Gulf financial picture.

But organisers of Cityscape insisted confidence in the real estate sector was high and there was a huge international audience who were interested in investing.

Nine percent of respondents to our poll agreed. They said that the doom mongers predicting a big crash in local property markets should not be taken seriously and they believed prices in the Gulf would continue to rise.

Another 16 percent of respondents agreed that prices would keep on an upward trend but that the rate of return on investments might not match previous years.

A second report by Colliers International earlier this week revealed rampant inflation and a booming economy resulted in house prices in Dubai rocketing by 76 percent in the year to June.

But its House Price Index for Dubai showed house price growth slowed from 42 percent in first quarter of 2008 to 16 percent in the second quarter of the year, fuelling fears the market is heading for a slowdown.

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READERS' COMMENTS

Real Estate Investor Sentiment
Posted by yatz on Monday 13 October 2008 at 08:43 UAE time


Well, up until now the sentiment was that you could throw money at anything and it would come back bigger. Now even 'macho' investors like Naz here are talking of 'risk'. There you have it.

Re. Naz's comment
Posted by SN, Dubai, UAE on Sunday 12 October 2008 at 18:34 UAE time


Well said SR. I couldn't agree more with you. In fact adding further to what you've very rightly said, my opinion is that out of that so called bold or elite top 10%, majority are people who have got money easily from family, friends or even in some cases through wrong means and is not hard earned money. So they don't mind loosing it (if they do). Where as people who earn their money by real hard work, are judicious enough and make nformed decisions and never 'bitch' about it.

Re. Naz's comment
Posted by SR, Dubai on Sunday 12 October 2008 at 11:45 UAE time


Your comment is very naive! I can not agree with your attitude towards risk. Different people have different appetite towards risk. Taking risk is not and should not be a bold move just trying to beat the market or based on personal hunch. It should be a calculated decision based on what return you get for the risk, if you can take higher risk (based on your wealth) you would be compensated with a higher return.
Otherwise, it is just like gambling!!

Reality of Life
Posted by Sanjay, Dubai, UAE on Sunday 12 October 2008 at 11:36 UAE time


What goes up, must come down. Very simple.

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