DUBAI: Real estate industry experts say that investors have started expressing confidence in the Dubai property market in the long term, though the property prices in Dubai have not been affected by the recent Dubai World debt restructuring talks.
Speaking to The Gulf Today the CEO of Leo Sterling, Laura Martorano said that despite all the negative economic indicators, Dubai will continue to thread a bright future.
At the same time the managing director of Harbor Real Estate, Mohanad Alwadiya, also confirmed that property sales enquiries have picked up.
He believes the hike in interest is a result of the debt crisis. “Since the Dubai World announcement, we have recorded a noticeable increase in the number of queries from private and institutional investors who are interested in taking advantage of the impact that the announcement may have on the overall prices of property in Dubai and in Nakheel developments in specific.”
Martorano says that investors who bought property in Dubai not later than two years ago still stand to make a profit despite the current low prices.
She however added that people who are suffering the most are those who bought properties last year on mortgage because prices were extremely high with mortgage rates high as well.
Martorano adds that those people who bought property before 2007 have not lost, even if they sell they will still make a profit. She further says that property prices in Dubai were not much affected by the recent Dubai World debt restructuring talks.
“We were closing transactions with a few owners in JBR and they are sticking to their own price and we closed it on their price,” said Martorano.
On the other hand, Alwadiya says that although the Dubai World request caused global markets to plunge and attracted criticism in the international press, the situation he says has been overblown. However, he feels the incident has affected investor confidence.
We definitely feel that the international media is blowing this news out of proportion and a major effort will be required to reverse world opinions, he adds.
“Prices in a ready market will not change much because there is competition. In a ready market, about 60 per cent of the purchases are cash purchases. Therefore, these people may not necessarily be so desperate as opposed to the 40 per cent who have mortgages and bank loans,” explains Martorano.
Industry sources however claim that property transactions in Dubai have fallen in November compared to figures posted in the previous month.
Statistics from Dubai Land Department show the number of villa sale, have increased by 24 per cent from 88 to 109 but there was a 41 per cent decline in the value from Dh290m in October to Dh170m in November.
Flat sales saw a 4.8 per cent increase in number from 1,354 to 1,420 but values took a 7.7 per cent dive from Dh1.3bn to Dh1.2bn.
Dubai’s average monthly market index in November has also seen a 6.98 per cent contraction to 2,124.98 from 2,284.42 in the past month.
October also reported other positive indicators with average monthly market index posted at 11.25 per cent hike and trade as per issued Dubai certificates of origin rose by 10 per cent in volume and nine per cent in value.
Despite all the negative economic indicators, Martorano is convinced that Dubai will continue to thread a bright future.
She says investors with the means should shop around, “It’s a great time if you are a cash buyer, because banks are anticipated to get more tight-fisted, as they will come under pressure in a bid to keep a safety net due to their exposure to Dubai World.” Martorano thinks the debt issue is unlikely to stop the market from rebounding.