Reports say that the property prices in Dubai are likely to come down in the coming five years as numerous new housing units are made available to buyers reports say. This could accelerate the growth of Dubai real estate as the situation would attract the both the buyers as well as investors.
 |
Dubai Properties |
In a report received by Reuters it is said that the prices will remain strong in the near term but new large projects are clearly going to boost supply the demand of residential units.
Property prices have approximately doubled in the past three years as the wealthy emirate has transformed itself into the region's trade and tourism hub. But a surge in construction projects, especially luxury residential developments, has raised fears of a property bubble.
In the short-term, the bank said a growing number of people moving to Dubai, a liberalization of property laws to allow foreigners to purchase property, high rental yields, and continued speculation will keep prices high.
"Our new real estate index...suggests that property prices rose further in January by 3.7 per cent," the report said. "Therefore it appears as if market sentiment remains solid."
The bank said that any correction in property prices would have a limited effect on the economy because of the strong financial positions of the United Arab Emirate's government and banks.
The report said banks have a limited exposure to the real estate sector and the federal government, with a budget surplus estimated at 26 per cent of GDP in 2005, can offset any fall in property prices by increasing infrastructure projects.
Source: Khaleej Times
