Amid the spurts of growth seen in Dubai property prices, a general wave of optimism about Dubai real estate has spread. Where everybody is talking about recovery, people have forgotten that the transparency of Dubai real estate market is fading away slowly owing to a number of reasons. In many areas across Dubai, people are making sweeping judgments about price rises. The fiction is ruling Dubai real estate market and no body is trying to find the current reality of Dubai real estate.
Potential sellers and buyers are predicting the trends which they think can benefit them. People are trying to treat Dubai real estate like a stock market where speculations and anticipation of events drive the price of investments up and down. Reports are published merely on generalizations made by the people, which are not accurate most of the times. These generalizations are adding to the non-transparency of once spectacular Dubai real estate.
Buyers and sellers must be conscious in comparing property values and reporting price rises, since Dubai real estate market is becoming highly fragmented. Though prices and rent in Dubai is heading towards recovery yet the price rise is only in the most sought after destinations of Dubai. On the other hand, secondary locations are still showing price declines, thus making Dubai real estate a polarized market.
Not only this, even the price of the property in prime areas also differs from development to development in the same location. This is further adding to the fragmentation of the market.
People are talking about price rise in certain areas and in certain type of property but they don’t know that Dubai property market has become much diversified now. For instance, villas showed recovery during the last quarter of the year 2011 but the price rise is less in this year as compared to the previous year. Many investors are still reluctant to invest even in the villas market and they are noticing price trends of the previous months.
Though price stability is there and many projects have shown better recovery but we should not say that prices have started to rise or they are still falling across the board.
The landlords and the sellers, who are tired of seeing their properties vacant or not selling since years, are inflating their prices based on their ‘feel good factor’. They feel this price exaggeration would help in healing Dubai real estate and soon they would sell their properties at quite high prices. Those sellers who were considering their villas selling at 4million are now asking 4.5 million and this price rise is not at all backed by the original demand.
The over inflated prices are not only creating false impression of the market but are also leading it towards non transparency.