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Dubai Property Experts Remain Confident as Prices Hit Their Bottom - 21 December 2010

Property prices in Dubai have bottomed out, it has been reported.

Once the overseas property star among British investors, Dubai has seen its housing market crash in recent years. Prices in some parts of the emirate have dropped as much as 70 percent.

Many developments that were underway when the recession hit — some as elaborate as the world’s tallest building — have gone unoccupied and supply has superseded demand there. However, property experts believe that prices will not drop any further and investors will start snatching up deals in the new year, which will once again even out supply and demand.

The oversupply of homes in Dubai should clear out by mid 2012, property experts added.

To give the property market a boost, the Dubai Islamic Bank recently announced plans for the UAE’s first real estate investment trust (REIT). This will let investors buy into a portfolio of properties, from which they can profit from rents and sales, much like the way mutual funds do from equities. With the Emirates REIT, banks can tap into liquidity from overseas investors who are eager to break into local property markets.

Dubai Islamic Bank, with France-based Eiffel Management, started the venture to attract foreign investors back to Dubai with a low-risk, long-term and secure investment plan. REITs account for 8.9 percent of all global property sales, excluding land deals, according to statistics.

Property experts see the REIT plan as a vote of confidence in Dubai’s property market and expect that many more like it will pop up as the economy recovers.

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