I can imagine how annoying it is when you read one report indicating recovery of Dubai real estate somewhere in 2013 while other at the same time indicating it not sooner than the beginning of 2016. Almost everyone who has any sort of interest in Dubai property market is keen to know the real year of the long waited recovery of the sector.
The reality is there are two groups of people, one makes the panel of those exerts who believe that worst has been over, prices have touched their bottom level and there is no reason that recovery would be delayed for the next 3 years. At the same time, the other panel of experts believes prices have still not touched the bottom level and there is margin in them to decline further. In this situation, recovery must be expected to kick start in the beginning of 2016.
Recovery in 2013!
The results of Q2 are out which reveal that finally after three years of limited sales activity and declining rates, the property market is now heading towards recovery. According to the report of Asteco, during the second quarter of the year, sales prices and rents of apartments went up by 9% and 10% respectively whereas villa sales prices and rents went up by 16% and 13% respectively compared to the previous quarter. Almost all the established communities in Dubai have recovered a tremendous increase in property values and number of transactions.
Owing to the price growth and increase in transactional volume, experts are showing great optimism for the other half of the year 2012. They strongly believe that the small spurts of growth we have been witnessing since the second half of 2010 have finally gained momentum. Since in the other half of the year prompt recovery is expected, we are very near to see Dubai real estate sector back to its original position somewhere in 2013.
Recovery in 2016!
The other group of experts, who don’t expect recovery in 2013, hold quite different views. The report of Asteco if on one hand indicates positive growth of sector then on the other hand also signals to selective stabilization in the sector. The report clearly shows that prime properties in posh areas like apartments in Downtown Dubai and Dubai Marina and villas on the Palm Jumeirah are recording growth but secondary properties are still facing rental and price declines. Despite the consecutive three quarters indicating positive growth, prices in International City are still on their same level.
The experts believe real recovery means recovery that would be uniform and without any selective stabilization. Moreover, the price declines in the neighboring countries also affect the price of Dubai property. Though apartments market has shown some growth in the second quarter yet the prices are still lower than their original prices. The segmented market indicates another three years to kick start recovery. They believe prices would show recovery by the start of 2016 and recovery would be slow and steady. It would be 2020 when they expect the prices roaring back to their original position.
The fact is there are merely predictions and no body can predict future exactly. This is for sure that conditions are bound to improve. It is the rule of the business cycle that after every bad time, good time is bound to come. Whether the year of recovery would be 2013 or 2016, one day we would all see the spectacular Dubai real estate sector springing back to life.