Friday, November 07, 2008

Changes witnessed in property scenario of Dubai

The real estate developers and agents in Dubai have been so far enjoying the benefits of the booming property market in the City, with investors ready to invest on any project that made it past the drawing board stage.

However, the turmoil during the last couple of months has brought about radical changes in their businesses. Leading developer Damac, which is currently working on 51 projects in Dubai alone currently, has already begun overhauling its organization. The developer is said to have axed a few employees.

The CEO of Damac Properties, Peter Riddoch, who spoke to AME Info, says that the ongoing global meltdown will eventually make companies reconsider their staffing levels and recruitments.

"Damac Properties too will consider its own position based on the market situation, and ensure that it maintains the right staffing levels," Riddoch said.

Another leading real estate agency, Better Homes, is also said to be feeling the impact of the global slowdown in sale of properties, with cutbacks affecting up to 50 percent of few of its departments.

When addressing a conference at Dubai International Financial Center, Sultan bin Sulayem, Chairman, Dubai World, ruled out any possibility of a drop in prices of the housing.

"The imbalances in demand-supply situation continue, and any downward trend in prices is unlikely, despite the fact that few investors may try to sell lower. There is an appetite in the market, but the will is lacking," Sulayem commented.

However, despite such assurances, the imbalance in demand-supply situation has not been found, and majority of new districts in the city, such as the Palm Jumeirah or the Business Bay, are still only partially occupied.

Changes within the property market in the city are already evident. For instance, a developer has already priced one of its projects for one-third the price than were originally mooted, a move which otherwise would have been never happened, even a couple of months ago.

The Ukraine-based VIP Waterfront, the developer of the Royal Bay project at Madinat Al Arab has launched the sale of the project, offering a price-cut, to tempt investors. It is said that the properties are going up to one-third less than what the group had previously planned.

This and several more such scenarios are an indication of the tightened access to credit, which led to several previous off-plan sales. This also points out to the fact that the future breed of property investors in Dubai would be the middle class, which has so far missed the opportunity.

3 comments:

Nicholas Down - Dubai said...

This is long overdue and regardless of the international credit issues this was inevitable. Now the market can settle and all the flippers that have invested on borrowed money to make the deposits and have no strategy to continue will try and unload the toxic waste they have collected. No the agents that are agents will go to work and provide the level of service that clients expect and demand.

muthukumar said...

Even though the glob cris has effected the real estate industry all over the glob , but the invester choice to invest is dubai and abu dhabi is of first prefernce , due his high
standard of living , and the new innovation of exprienced arc and the challanage to face any difficulty
my special thnx to david and ali from the bottom of my heart, that have accepted the challange to make a construction on sea,( the palm project) which i have seen on discovery channel, and thnx to them too fro telecasting this on thier channel, and i also request to them to telecast more n more shows like from all over the glob.
muthukumar mumbai

Dubai Realest said...

Ofcourse they will have to. This is global and it will affect Dubai too.