Saturday, March 14, 2009

Dubai property prices drop to mid-income levels

According to experts, mortgages in Dubai would be easier to reach, with the property prices likely to drop to mid-income levels. Applications from potential buyers seeking mortgages have dropped considerably in recent months.

Property prices are plummeting throughout Dubai, thereby bringing about a ray of hope for those that were earlier considered out-priced. But the huge mortgage requirements and large deposits are keeping them away from easy reach.

The Managing Director of Almas Capital, Barmak Besharaty, when speaking during a Cityscape networking forum, yesterday, mentioned that Dubai would surely be a better place to live in, once the families can afford to buy or rent. This is likely to happen when the real estate assets align with the mid-income margin in the country.

Until a few months back, property in Dubai was meant only for the wealthy. Several developers were offering luxury lifestyle, which were out of reach for majority of the common population. Developers were pushing up prices of their properties, to keep up with the speculators and market forces, aiming to make money.

However, at present, one can get a decent mortgage in Dubai, if they are free of car loans and personal loans, and have atleast Dh.300,000 in a bank account, as a handy deposit, and ideally, draw a huge salary, said Shohail Zubairi, Chief Executive of Dar Al Sharia, the Legal and Financial Consultancy.

However, the average mid-income person already has atleast one loan, and does not have several thousands of dirhams as balance in their bank account. Moreover the current mortgage rates are not too attractive either, he points out.

However, in the current situation, even the developers need not bother about building new affordably housing developments aimed at mid-income bracket, as several developments in Dubai that had earlier been branded as luxury developments, now fall within the mid-income bracket.

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