Friday, October 29, 2010

Dubai property prices yet to hit bottom: Prince Alwaleed

Dubai's depressed property prices will take several more years to bottom out, before recovering, as the market still remains over-supplied, predicted Saudi billionaire, Prince Alwaleed bin Talal.

Alwaleed said that there are several new buildings coming out in Dubai, and the market is yet to hit bottom, and there are years to go before this could happen, as there is constant increase in supply.

Alwaleed, the nephew of King of Saudi Arabia, King Abdullah, mentioned this when speaking during an interview with Arabian Business online magazine.

The prices have to go down considerably for the demand to reach on par with supply, said Prine Alwaleed, who is also the world's 19th richest man with a fortune of 19.4bn dollars, as ranked by Forbes.

Several landowners are holding on to their old prices. Only when the prices go down substantially, there will be increased demand, he added.

Ever-since Dubai was hit by the global financial crisis, the prices of housing in Dubai have dropped by 50% from their peak in 2008. The Dubai Real Estate Authority has already said that about 480 construction projects which were in their budding stages, have been cancelled to tighten the noose on supply.

However, several developers are left with no option, but to continue working on their ongoing projects, thus adding more units to the already saturated market.

The five year property boom in Dubai was mostly contributed by speculators, who were drawn by the attractive profits made through sale of off-plan properties. These investors vanished when the crisis hit the emirate, with many writing off their initial investments.

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