By Andrew Sambidge
Bottom of the market is close to materialising, global property agency says.
Chesterton, the international property agency, has predicted that the UAE will make a "strong comeback", saying improving economic indicators has increased investor confidence but that more needed to be done to make mortgages more accessible. Robin Teh, director, Valuations & Research, said the arrival of several investment funds targeting distressed sales, especially in Dubai, was a sign that the country's real estate market was bottoming out. "This is usually the first signs of recovery for a maturing property market and we believe that the bottom of the market is close to materialising," Teh said. "Dubai is on its way out of the property slump and this is due to a rise in confidence within the consumer and financial sector in addition to a surge in transaction volumes. We have mentioned earlier this year that despite the current economic challenges facing the worldwide property market, Dubai is forecast to grow at a rate of 4-6 percent per year until 2015,” added Teh.
But he said that despite signs of property prices stabilising, he saw the price of mortgages as the main reason for the market not recovering as quickly as it might. “The main factor which to some extent is retarding a stronger level of price increase or market activity is the cost of finance. Whilst remaining at above 7 percent per annum, interest rates are continuing to favour the lenders rather than the borrowers,@ he said. Salah Mussa, chairman, Chesterton International, added that the rising oil price would also help to instill confidence in the country, adding Dubai would learn to be "more cautious" following the November debt announcement of Dubai World.
“As Dubai learns to be more cautious with financial support from its two tranches of bonds of $20 billion, there is every reason for it to make a strong comeback. The UAE duo recharged, reformed and combined will make them natural exemplary champions for the rest of GCC,” said Mussa.
And last week only UBS said that prices could drop a further 30 percent from current levels by the end of 2011. Which one to trust now? AB, please heeeellllppppp....
Cheserton, Can you kindly place your money where your mouth is!?!? I have a townhouse that was purchased at a 7% price discount which I am willing to give you another 6.5% discount for a price of 2 million AED even. Thus, based upon your words of wisdom, you will be getting it at a steal. Do you agree?
To Whom_to_believe, Doha: Chesterton is in the business of real estate brokerage...hyping the real estate market gets them paid....big bucks as the markets heats up. Commissions are percentage of sale prices...isn't it? UBS a financial services firm. They are not in the business of real estate brokerage. They would not benefit from any hype in real estate prices. Part of assessing the quality of an opinion is to analyze the WIIFT (what in it for them) effect.
Sounds like to me that as the people who caused the crash in the first place were totally incompetent, despite the best qualifications in the world to do their jobs - the real estate predictors are also just as confused - with articles one minute predicting further doom and gloom and the next recovery. It's all very tiring. My advice (from someone who doesn't have a PHD in real estate) is that it will start to recover this year (everything has a cycle) but that people should be cautious not to borrow more than they can pay off so the situation doesn't happen again. It would also help if the banks bought the interest rate down a bit. Let's be hopeful....it's contagious - as is doom and gloom. Shandra
Chestertons...just like Scooby Doo...they have no clue! Their market analysis is so lame and their economic overview and forecast is worse. Chestertons...better to be thought a fool than to open your mouth to be proved one. With regards to your market commentary ...that saying is pretty apt!
I believe in Chesterton and their advisors and would happily continue paying for their services. They are a great company led by the best people. Their advisory area would no doubt be making these predictions based on sound data. I know in Australia - parts of this country are already in recovery mode - so guys be positive and encourage your counterparts!! Cyclone.