Dubai real estate agent survey shows cautious optimism

A recent survey of over 170 Dubai real estate agents by www.TheEstateAgentsDubai.com has revealed that the majority of them, 77% in fact, are optimistic the Dubai real estate market will rebound within 3-6 months.

Before I carry on with this post I should point out that the company I work for is the founding member of www.TheEstateAgentsDubai.com and that I'm the webmaster for the TEAD site and forum.  Just so there's no misunderstandings ;)

For those of you who are unfamiliar with the Dubai property market it's been going through a huge growth spurt since May 2002 when the Government introduced a law that allowed expats to own properties in certain areas.  Prior to that law expatriates could not own any property in Dubai.  It's not uncommon for properties, especially villas, to have increased in price more than 100% in the past 2 years (and I'm being conservative when I say that).  The first half of 2008 saw a large increase in property prices.  Then summer hit.

Summer is the dead period here, 45 degrees C for 3 months is more than a little sticky and so many people leave for several weeks.  Business was slow in September due to the Holy Month of Ramadan, then Eid, so it wasn't really until October that we expected business to pick back up to pre-summer levels.  Except this didn't happen, things stayed slow - in fact many people told us their business was dead.  This may not be news to anyone in the US or Europe, but to us in Dubai this was a major shock.  We'd often considered ourselves to be if not immune, then certainly sheltered, from the storm.  We were wrong.

To cut what could be a long story short we decided to put together an agents-only real estate forum, and to kick things off we did a survey of agents to see what was really happening.  The results were shared with agents in the forum, and I must say the results were very upbeat.  77% of respondents believe the market will pick up in the next 3-6 months, that's despite the difficulties in the world wide market.  Since the survey two points of view have appeared on the real estate agents forum on what will happen in the Dubai property market.  The first view essentially believes Dubai is tightly hooked into the global credit market, that banks do not have the liquidity (or refuse to use what they have) to restart mortgage loans, and that Dubai cannot defeat what the rest of the world has been unable to escape.  The second point of view, which I personally subscribe to, is that as the real estate sector in Dubai accounts for 30% of its economy it simply cannot be allowed to fail.  The Emirate has grown fantastically over the past 36 years and has shown itself to be tremendously resilient and capable; those same values will enable it to find a local solution to this issue.

Since the survey there have been further developments which support the second point of view.  I'll go into them in a later blog post, however what's been happening this week has certainly cheered many of our colleagues and contacts in the real estate sector.

Paul.

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