Friday, July 04, 2008

Dubai, Northern Emirates realty markets to stabilize by 2010

According to a leading developer, the property market in Dubai and other Northern Emirates is likely to stabilize towards 2010, attaining a sustainable balance between investors and property owners.

The realty sector in the United Arab Emirates has witnessed an unparalleled growth over the recent years, due to the frenetic and speculative property market in Dubai, surpassing the rest of the Arabian Gulf States together with ease, said Mohammed Nimer, the CEO of MAG Group Property Development.

The construction boom will reach its heights during 2009, with about $3billion worth of realty under construction. Thereafter, the value of market is likely to fall back to the levels during 2007, of about $1billion, as majority of units are delivered. Hence, this is hoped to subdue the surging market prices, he added.

According to CEO of MAG Group, homeowners currently account for 30 percent of properties sold at launch. Real estate sales are currently being largely dominated by short-term investors, rather than end users. This has led to inflation in prices, as the units are 'sold-on' premium several times prior to completion.

The evidence of UAE construction boom reaching its peak next year is evident in the database of Proleads, a Dubai-based research company, which keeps tab on major construction projects across the region from initial planning to completion.

The database displays about 80 units blocks individually budgeted at a value of $100million now under construction in the Northern Emirates and Dubai, with a total value of $4billion. A dramatic decline is seen in the database on announced or newly planned constructions on similar buildings for next year and by 2010, dozens of projects are shown to reach completion.

With most projects still being under construction and the next bunch of supplies hitting the market in 2009-10 will help in bringing about some stability to the market, Nimer pointed out.

However, this is not likely to provide a major respite from mounting prices, as certain other factors such as ever- is not something to be expected in the short term, Nimer concludes.

1 comment:

Garagen said...

ihave you heard ,dubai's prince is planning to make an island of his own.