Dubai Property Prices
Near the end of 2009, Dubai property prices are thought to have stabilized after going down for a year or so. In 2008, many new investors bought Dubai real estate, which inflated prices as people bought and sold Dubai properties known as "flipping"
In just the first quarter of 2008, Dubai property prices for sale went up close to 50%. Now, those gains are a thing of the past. Dubai property prices have gone down close to 40% from fall 2008 to fall 2009.
The typical Dubai property price during the final quarter of 2009 went up to Dh1,022 ($278 US) from Dh1,1016 from the 3rd quarter of last year. There were 15% less property buy and sell transactions in the last quarter when you compare it to the three months before that.
Average Dubai property prices went up about 1% in the fall of the last year, which actually masks a large difference in how luxury apartments and homes are performing in the real estate market. Homes actually gained close to 10% in value while apartment units lost about 4% in value. The large drop in prices on the latter is thought to be the result of negative equity causing investors to leave the country because they could not pay their debts.
International banks are concerned that these home loans gone bad are going to cost Dubai several billions of dollars but banks are often reluctant to repossess the homes because foreclosing on properties is something new to the country.
In the recent past, banks are starting to figure out how to win these cases of repossession through the court system. Whether or not the legal rulings are going to actually help banks get their investment or not remains to be seen. The courts are not known to rely on precedents.
The Dubai world conglomerate said in November it was asking for a freeze of 6 months on their outstanding debts. Currently it is working with as many as 90 creditors in order to restructure close to 22 billion dollars in debt.
This year in 2010 we have seen rents drop and freehold property prices bottom out with a forecast for prices to start to increase again in 2011 so take this opportunity and make an investment at the right price now and we will continue to keep you updated on all the Dubai property news each day every day.
