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Year 2008: A Peep Into The Future Of Dubai Property Prices
Before we look into Dubai real estate prices and try to draw conclusions on what we can expect in future. Let's have a look at some basic factors, which helps in assessment of property prices and real estate valuation. These factors are
1. Demand & Supply
2. Cost of building
3. Buyer's income
4. Cost of financing
5. Competition
Real estate prices are hugely affected by the principles of demand & supply. If the supply surpass demand, the prices will start going down, in other case where demand is higher than supply, we will see an upsurge in prices. Cost of financing comes next, in majority of mature real estate markets; most buyers rely on mortgage and other means of home finance to purchase a home or property. Rate of interest on these loans can influence the property prices. Same is the case with building materials and labor cost. Average income of potential buyers and competition can also have an impact on prices.
Coming back to Dubai, the property prices have been on a rising streak ever since the Dubai Government allowed the foreigners freehold ownership in some areas. ...
... The demand was much higher than what the existing developers were able to supply at that time. More and more expatriates meant a constant rise in rents that also fueled the property prices and they kept going up. Dubai and other estates enjoy a very good per capita income (thanks to all those petrodollars), plus Dubai had no immediate competition from neighbor estates in the beginning (Abu Dhabi, Ajman, etc have only recently started to offer an alternate to Dubai real estate), these factors combined with the hype some of the mega developments (Palm islands, Burj ul Arab and Dubai mall to name the few) got, helped the market to maintain the price increase all along those years. Prices not only increased, they actually doubled or tripled.
Things have started to change a little bit now, as more and more developers have entered in the market and lots of projects are now in completion phase, supply is quickly catching up with the demand. Expatriates are forced to find a residence outside Dubai because of some abnormal rises in rents. Ajman and Abu Dhabi are now offering the investors some equally profitable opportunities. Keeping all these factors and changing scenarios in mind, we can safely conclude; that while it will take some time before we see a drop in Dubai property prices, the rate of growth is about to slow down in coming years.
About the Author:
William King is the director of UAE & Dubai Real Estate & Property Portal: http://www.bayut.com , Pakistan Properties & Real Estate Property Portal: http://www.zameen.com and Property & Real Estate Directory : http://www.propertydir.com . He has 18 years of experience in the marketing and trading industries and has been helping retailers, entrepreneurs and startups with their product sourcing, promotion, marketing and supply chain requirements.
Dubai, Property, Prices, Price, Real, Estate, Market
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