Dubai: Is real estate riding for a fall?
If you cast doubt on the future of the Dubai real estate market, those with stakes invariably tell you that they have heard it all before. "Every year they tell me something will go wrong, and every year I see Dubai growing stronger," Adel Al-Shirawi, CFO of Dubai home financier Tamweel, told Euromoney earlier this year.
As the decade draws to a close, however, it would appear more likely that the factors conspiring to prove the nay-sayers right might finally triumph. By early 2009, a 7% governmental cap on rent increases will have had its desired effect on inflation. At around the same time, long-delayed construction will have been completed, and supply will be much higher. Furthermore, the expatriates who prop up the higher end of the market might, in the next year or two, start to turn away from a city that had become just as expensive, if not more expensive, than their own countries.
Immigrant labour from India might also start to dry up as workers from that country find more opportunities back home.
According to a report released at the end of September by Egyptian investment bank EFG-Hermes, property prices in Dubai will reach a peak in the second half of next year.