75% would not invest in Gulf real estate sector

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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