Dubai Property Crash? Rents To Drop?

If you have been following the news recently or my Blog, talk of a Dubai property crash may not be all that new to you. It has long been branded around that the Dubai property market was heading for a crash and the infamous "bubble" stories, but with nothing having materialized, should you pay attention this time?  Some are saying a property price correction of around 10% could be on the horizon, with others going as far as to predict a full scale bubble bursting property crash! Are things really looking as bad as some media outlets would have you believe, or is it all a lot of fuss about nothing? Are there buyers out there who are currently priced out of the market and are waiting with baited breath for people to panic and sell Dubai property on the cheap.

Well it’s probably fair to say to that Dubai property prices have risen a crazy amount in the short time since the market first took off, and if prices had continued to rise at such a rate, things would certainly looking bleak about now. Such rapid prices rises can only eventually led to one thing, and that is a property crash. Such rapid prices increases are usually followed by a rapid crash in prices not so soon after. However the Dubai freehold property market has now started to see some sort of balance. Whilst prices are still on the up, they are increasing at a much slower and more sustainable rate. Demand still remains high, so predictions of a property crash might well be wide of the mark. More people seem to be swaying to buy Dubai off plan property these days to avoid the premiums and take up on the good discounts and free cars etc the developers are offering.

The Dubai property market is very much unique, and enjoys a number of influences not seen in other property markets. The main two property developers in Dubai are linked to the Government, and the Dubai Government closely monitors the real estate situation. One of the main reasons for the rapid increase in property prices is the rapid buying and selling of property for a profit. It is this high level of speculation that many believe has led to overvaluation in some areas of the market. However both Emaar and Nakheel have since implemented new policy, whereby buyers purchasing property now have to wait around a year before selling it on. And the Dubai Government is also contemplating making such and idea into law, so as to affect all property across Dubai.

With property price increases already slowing, and the implementation of the above legislation, the market here looks to be stable in the long term. Dubai property prices will at some point level off, but at the present time a property crash looks unlikely for now the same goes for rents, until more of the delayed projects come online I can`t see the rents decreasing with the massive influx of people coming to the city at present.    
 

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