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Time to bide and buy in Dubai? - 2 March 2009

Dubai has to be regarded as one of the biggest success stories in the development of overseas property in the pat 40 years. The size, scale and sheer imagination of some of the building projects seemed to have been matched only by the ambition for the development of the Emirate itself. The sheer fact that so many Brits have bought property in Dubai is testimony to how far it has developed as a Western-style economic force.

As business and culture developed and at times struggled to keep up with the pace of developments outside on the building sites and man-made islands, the economy of Dubai has grown hugely, outstripping almost anything else in the world. However, the onset of the global economic downturn has not left Dubai alone, and this part of the United Arab Emirates is suffering as much as everywhere else in the world.

Part of this is down to the fact that most people living in Dubai as expats exist extensively on credit, and the restrictions placed upon granting new credit make their lavish lifestyles a thing of the past. But what does all of this mean for the property market in Dubai?

Stories abound of prices falling by significant proportions across the Dubai. Some reports suggest anecdotally that property process on the Palm islands have fallen by as much as 60 per cent in some cases, but it is important to keep some perspective on the over-inflated levels at which some properties were being marketed. While the price of much of life in Dubai has been over-inflated for some time now, the market is ripe for a correction in terms of price, supply and in some cases, people.

If the economic downturn will do one thing for Dubai, it will bring a dose of realism. Some companies (and individuals) have been living on too much easy credit and not considering the consequences of it. This will mean that for a time there will be plenty of vacant properties available to buy at knock-down prices. No-one can be sure as to how long the economic slowdown will continue, but there will be plenty of people looking for a bargain in Dubai in the next couple of years.

While there is currently a shortage of buyers, Dubai still has the potential to attract huge numbers of visitors every year. Not only will it have the largest airport in the world, providing a hub for people changing routes and going on to other parts of the world, but the attractions which have been promised in order to bring in tourists and visitors are all still likely to be built, though may be delayed.

In many ways, the reasons for investing in property in Dubai are the same as they ever were – it is all about buying in to the potential of the place. The times for making a quick buck on Dubai property are long gone. There will be opportunities to buy some exciting real estate in Dubai in the near future, and at prices that are a whole lot more realistic than was the case even a year ago – just make sure you bide your time, negotiate hard and buy a property you would be prepared to live in yourself.

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