The Dubai property prices are starting to cool after soaring prices brought fears of another bubble to the market.
The United Arab Emirate’s city is still clearing up after this year’s Cityscape property expo, but developers and agents feel concerns about a runaway housing market are overstated.
The expo was attended by more than 300 exhibitors showing off their plans for new developments in the city.
The show was held against a background of tougher regulation by the Dubai government to give property buyers more security and rights after allegations developers had ripped them off in the past.
The International Monetary Fund (IMF) had also recently warned the government should act to steady the market to safeguard against another collapse in prices.
Government regulation
Following the credit crisis, property prices in the city plummeted by up to 50% and are only just beginning to climb back to their 2007-08 peak.
Local property experts also argue that prices are starting to level off.
The cooling of the market follows action by the government both to regulate developers and agents while restricting speculative investment at the same time.
Much damage was done to the city’s reputation by developers taking deposits and failing to complete off-plan homes for buyers – and some saw the same spectre starting to arise again as new developments were sold out before the ground was broken for building.
International property consultancy CBRE reports house price growth has risen by 23% in the past 12 months, but has slipped back to a slower rate in recent months.
The survey also found the number of sales was up just 1% in the third quarter of 2014, compared with 6% in the same period a year ago.
Unsustainable prices
“Undoubtedly government measures that have made buying homes more expensive have helped slow down the market,” said a spokesman for another property firm, Cluttons.
“Prices shot up last year and there was no way the market could have sustained such high increases. Prices will go up, but we expect to see them align more with the sort of growth we are seeing in other countries.”
Nevertheless, several developers announced multimillion dollar showpieces at the expo.
Waterfront resort Palm Jumeiriah will see 1,300 new homes among 5 million square of leisure development.
Other developers are exploiting reclaimed land with spectacular residential and leisure projects costing billions of dollars, including a number of new waterfront hotels.
