UAE real estate recovery later this year - banker

PRICE PREDICTION: Arqaam Capital's MD says house prices will be higher by the end of 2009. (Getty Images)

The recovery in UAE real estate stocks signals a recovery in Dubai property prices later this year, according to an investment banker who predicted that Dubai real estate would bottom out in the second quarter of this year.

“I am pretty confident that by the end of the year, house prices will be higher than they are today,” said Ali Khan, managing director of Arqaam Capital, in a recent interview.

Khan caught flack from Arabian Business readers in December last year when he predicted that Dubai real estate prices would reach their bottom in three to four months’ time.

“The real estate market will reach a bottom a lot quicker than people are anticipating,” Khan said at the time.

To date, 56 readers, most of them skeptical, have commented on his views in that article. “Sorry Mr Khan - this is an illusion,” wrote one reader.

But recent research suggests the Arqaam boss was right. Agreed property prices in Dubai and Abu Dhabi showed a 4 percent gain in April compared to the previous month, followed by a 5 percent rise in May, in HSBC’s latest transaction survey.

Khan also appears to have been correct about UAE real estate developers swiftly adopting new strategies in the face of dwindling revenues from their traditional business models.

“We’re clearly seeing signs of some of these real estate firms actively trying to change their strategies and soforth,” he said in December.

Since then, Abu Dhabi master developer Aldar has said it is reviewing a number of high end projects and that it is looking to create more affordable housing in the UAE capital.

Similarly, Dubai developer Deyaar will all but abandon the UAE market next year in favour of building affordable housing in markets such as India, Turkey and Saudi Arabia.

“Real estate prices have begun to stabilise, if not bottomed out completely, depending on which report you read,” Khan said in the June interview with Arabian Business.

“The stock market will stay well ahead of that view, normally it’s a six to eight month indicator. That is why already a few months prior to these reports coming out we have begun to see real estate stocks move quite significantly upwards.”

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READERS' COMMENTS

Long term sustainable recovery
Posted by Hassan Malki, Dubai, UAE on Wednesday 10 June 2009 at 12:07 UAE time


As the real estate market shifts from a speculative short term nature to la ong term holding and end user nature, the key to recovery is having reasonable credit rates so that holding can be sustainable and monthly payments affordable. Right now 8% or so is just too high. We need aggresive rates at 5% or even 3% to stimulate demand.

to Abu Jameila
Posted by Abdallah, Dubai, UAE on Wednesday 10 June 2009 at 09:36 UAE time


I understand your frustration but you have to remember that most people who live in Dubai believed in Dubai and most of them still do; however, one cannot neglect the fact that investors in real estate where not provided with any regulations that protects them from the greed and God-like attitudes of developers who are managing to get away with anything.

A home first...
Posted by Abu Jameila, Dubai, UAE on Wednesday 10 June 2009 at 06:43 UAE time


We are so close to the bottom of the market, if not already there, that anyone holding off to buy property at lower prices will only be disapointed and miss out again on good capital gains. Most importantly, those of us who were wise enough to invest in Dubai have a home here and most of us are happy. Enough of the negative talk by those with sour grapes who feel they have missed out. If you want to put down Dubai, why not do it from afar and let those of us who are like this place get on with our business.

UK Bashing
Posted by Harry Winston on Tuesday 9 June 2009 at 21:06 UAE time


Harry Winston is not a UK basher. Its just that cold, bone chiiling rainy weather, where i cant play Tennis or bicycle gets me depressed. Harry Winston is a Consultant and can work anytime in the NHS, but prefers to work in warm weather, with sunshine, and have all his expenses paid by his employer. I would rather say that most people would prefer to leave the UK, only if they could get a job and not vice versa

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