You might have read the reports about Dubai real estate highlighting kick-start to recovery in 2012, but I would say, this is merely a predication based on “the feel good factor” of the property stakeholders. I believe property prices in Dubai have not shown any remarkable recovery in 2011, which reports show. These are just the sellers and owners of the properties who want to derive the prices up through rumours. The fact is property prices in Dubai are still not touching the bottom level but yes, we can say they are near to touch the bottom.
It is expected that the mid-2012 would be the time for Dubai real estate when prices of the properties will touch the bottom level in real. However, despite that recovery cannot be expected even after mid-2012 due to the heavy supply of the residential units expected to add to the market in the year. Some experts are even not predicating much demand as they think people are still hesitant to invest in Dubai properties. In contrast to what the reports highlight, the year 2011 remained another challenging year for Dubai real estate.
On the other hand, the prices of properties in Abu Dhabi are expected to fall by another 15% in the following year. On the other hand, rents in Abu Dhabi are also predicted to fall by another 10% during the year after which the recovery can be expected. Abu Dhabi property prices will continue to decline because the crises hit Abu Dhabi real estate late as compared to Dubai real estate and so this sector will also spring back to life late.
Average prices of the residential units in Dubai like Apartment in Dubai, villas or many other accommodations fell by 12% in Dubai where as in Abu Dhabi the average prices of residential properties dipped by 17% in the previous year. Prices of villas and their rents opposed to apartments showed slight increase in prices. Though overall in 2011, Dubai real estate prices declined but this is evident that the rate of decline slowed down as compared to the rate of decline we noticed in 2009 and 2010. Still if we look at the trend of prices in 2011, we cannot predict quick price recovery in 2012.
Also the prices of rent in Dubai are expected to continue their declining trend in 2012, unless they touch the bottom level. Once they will touch the bottom level in mid 2012, it is not necessary that they will start recovering. They can also remain stagnant unless demand originates and problem of oversupply resolves to push the prices up.
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