By Shane McGinley
Economic experts paint positive picture for property sector at panel discussion in Dubai.
The UAE's real estate market has bottomed out and will begin to recover in 2010, according to economic analysts speaking at a panel discussion in Dubai on Wednesday.
“I think the real estate market has bottomed [and] I include Dubai in that,” Neven Hendricks, COO at Deloitte Corporate Finance Ltd - MENA region, said on the sidelines of the Dubai Knowledge Village Breakfast Club panel discussion.
“I see real estate market trending upwards gradually towards the end of 2010,” he added.
Hendricks said he believed that speculators have been chased out of the market and are being replaced by end-users.
“I don’t think everyone is going to rush back into the market. You will see a loosening of credit in 2010 and you will find more buyers in Dubai who have a long term interest in the future of Dubai. Those buyers will come back into the market and that will encourage property values,” he said.
Marios Maratheftis, regional head of research at Standard Chartered Bank, also believed the market had bottomed out but he did expect a quick recovery or a return to the levels seen in 2008.
Maratheftis said the UAE government should introduce regulations to prevent any future fluctuations. He advocated a change in the deposit structure, where buyers pay more upfront to invest in a project, and the introduction of a capital gains tax for flippers who buy and sell within a short period.
Collier’s recent Dubai House Price Index for the third quarter of 2009 found that while prices were down 47 percent year-on-year, they rose 7 percent compared to the second quarter and the volume of transactions grew 64 percent in the same period.
Figures from the Dubai Land Department, announced on Tuesday, showed the total value of apartment and villa sales in Dubai in October rose by more than 50 percent compared to the previous month.
However, UBS said earlier this month that the Dubai market may take a decade to return to peak levels, due to the amount of oversupply in the market.
I think they are not watching the fall of US dollar which is going down day by day and the only reliable investment is now only in Gold because the more dollar falls the more it goes up, moreover the price of oil will fall further as the US and western economies struggle to recover and as Dollar replaces with Ameero. People in Dubai still loosing their jobs, Western, Japanese and American companies are struggling for their payments of projects which they have done in Dubai So where are the signs of recovery, these so called experts are themselves the speculators and are making a desparate attempt to move up the market.
I believe supply of existing real estate in Dubai still widely exceeds current demand. Given the weakness of the recovery, which is supported mainly by stimulus from debt-ridden governments in the West, I don't see these fundamentals changing in the near term. While I do not contest these experts' good intentions, remember that the only thing economists have proven during the crisis is this: talk is cheap.
I think we're all bored of carbon copy reports - we've hit bottom & now recovering. Three year from now, when prices post another 50% free fall, headlines will once again read "We've just hit bottom, and on way to recovery - dated Nov25, 2012. If you noticed, feedback/comments on these reports are decreasing.. simply because people have started to ignore them.
Bottom is here.... haven't we heard this before? I think we are slowly sounding like War on Terror lingo, trying to push the BOTTOMING OUT to DXB so much, hoping people will blindly follow it, think it too. But I'm afraid the facts are quite different on the grounds here. Not everyone falls for these reports, by experts, who suddenly disappear if their own reports are proven wrong.
Locals live in their villas and won't be going on any new shopping sprees and those that got bitten in the last downturn won't be entering any time soon to buy again until Banks start loaning, Government starts issuing residency visas (without ridiculous fees) and the local community fees are decreased to what people can actually afford to pay. These 15,000-60,000 DHMS per year in community fees are crazy high. Since none of the above have been changed by the government I say we have not reached bottom. Add over supply and we have a long time to recover since most of these buyers will be overseas expats and not locals. Since the expats contribute so much to growth in the local economy I wonder why the expat investors always get the short end of the stick in the UAE??
this must be a new paradigm, Dubai flies in the face of natural economics. Lending money will not get easier. A credit induced recession needs on average 7 quarters before lending goes back to normal, ie end of 2010. However the quasi brankruptcy of Dubai world puts even this in question. Supply, If I look at what is available on the Palm then add over the next 6 months the release of the Marina Residences, Oceana and the Fairmont...that is one huge amount of supply. So not sure what basis this article if built on? Sand? I am not a negative person, I believe in 5 years we will have a strong Dubai, but we can not ignore economic realities.
Sadly, more wild statements from so called "experts" and "analysts" in the hope that their so called titles will hype the market and their wishes to the Genie in the lamp will be granted. When will Dubai rid itself of these deliverers of such suspect information which adds to the lack of credibility in the region??
Comn' AB is a yo-yo when it comes to news. People forecasting good and then bad. Good and bad and then some more "experts" saying everything is great I hope today's new will shut a few people up http://www.arabianbusiness.com/574586-standstill-deal-sought-on-dubai-world-nakheel-creditors It is time to be realistic and base the forecast on data and not just "experts" assumptions
Only fools believe them. Once upon a time when there were many fools in Dubai, the same experts could sell properties on paper for millions. Now all the fools gone away these so called experts should be driven out of Dubai for Dubai's realistic future.
Arabian Business has serious credibility issues to serve up this slop after Dubai has just defaulted. What expert analysts? Send them back to school. Or tell them I have a few bridges to sell. Going cheap. Only up from here. The local press is a joke. They should be held accountable for the garbage they publish. Or at least rated on how much actually turns out to be true. People could then be informed of what slop not to accept when it is served up.