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Global real estate market slump until 2011
The global real estate market will not recover until 2011 at the earliest, an industry expert warned on Monday.
Peter Barge, CEO of Jones Lang LaSelle Asia Pacific, said no real estate markets would be immune from current crisis, and investors should pull their investment funds back from markets.
“Short-term, investors need to make some tough calls in 2009/10. I don’t see opportunities re-emerging until after then,” he said during a speech at Cityscape.
Barge said investors needed to adjust their risk management and consolidate their positions, in order to take advantage of opportunities when markets recover.
Investors should have seen the current problems coming, he said.
“Prices were unrealistically high, the market was overheating. Property prices in Dubai real estate were unsustainable, people should have seen the writing on the wall,” he said.
Risk management was poor in the region and issues such as spiralling construction costs should have been considered by investors before they became a major challenge, he added.
"There are some positives in the Gulf. There is rapid economic growth, high energy prices and increasing transparency. But the negatives are inflationary pressure, the project delivery challenges developers are facing, and infrastructure is failing to keep up with the level of development," he said.
Meanwhile, economics author Marc Faber told the conference the US recession would plunge the world into synchronised global financial chaos, and predicted the US dollar would be worthless within 30 years.
Faber said he would watch the stock market performance of property developer Emaar to gauge the true state of the UAE’s property market.
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