Property prices stabilising: Sherwoods
Dubai, June 30, 2009
Sherwoods Independent Property Consultants (SIPC), a leading real estate consultancy, sees a steady shift of property prices in Dubai towards more reasonable levels, as the market enters a new phase that will help the transition into recovery.
Sherwoods further expects to see concrete signs of growth in terms of property prices and real estate investments starting in the fourth quarter of 2009, even as it predicts 2010 to be a year of stabilisation and new direction for the real estate industry.
The consultancy attributed the impressive performance of the property market in the heat of the global economic downturn to Dubai's decision to enhance infrastructure development in the emirate.
Sherwoods likewise credited key industry players for quickly adjusting to the dramatic changes in the market environment, while urging them to focus on the "positive attributes of the global recession."
"I would say that the prices have been corrected to reasonable levels, which has created more value offerings to buyers and investors,” said Iseeb Rehman, managing director, SIPC.
“The positive signs we are seeing should result in more tangible proof of growth around the fourth quarter of 2009, during which property prices will further stabilise and we can also expect a marked increase in property investment."
"Furthermore, 2010 should be a year of stabilisation and direction as Dubai transitions into a more stable and robust market for property investments,” he added.
“I would like to point out that the prices available today are conducive for long-term investment and should make good profit in the long term. I would therefore not advise anyone to enter the market for short-term investments at this point of time.”
Sherwoods revealed that at the height of the economic downturn during the first half of 2009, Dubai's property sector has been able to stay in relatively good condition because of the significant reduction in the number of speculators in the market, a major positive development that has been remarkably attributed to the downturn.
The real estate expert also pointed out that the recession gave Dubai an opportunity to consolidate its real estate regulations and legal framework, while delivering equilibrium in the demand and supply levels of the market.
"The property market has managed to use the positive attributes of the global recession to its advantage, which has resulted among others, in the decline of speculators in the market,” said Rehman.
“It has also brought more clarity on regulations and helped better define the legal framework regarding real estate issues. Nonetheless, the past half year was indeed a challenging period, and one that has not been tackled by the market before. On the other hand, it has allowed us to expand our understanding of market dynamics, which will lead to better judgement in the future.”
Sherwoods also credited Dubai's commitment to aggressively pursue key infrastructure projects such as the Dubai Metro amid the searing global economic difficulties as important steps that helped sustain international interest and attention on Dubai.
Puniet Singh, chief executive officer - India operations, SIPC, said: "Dubai’s focus on continuous investment in infrastructure is its main strength in dealing with the economic slowdown. The icing on the cake is the mobilisation of the Dubai Metro and opening up of the Burj (Downtown), which should attract the world's attention again towards Dubai."
Sherwoods also described as "extremely positive" the initiatives undertaken by RERA to protect Dubai's property market, although it noted that there is still a lot of work waiting ahead.
The company disclosed that RERA will have a critical role in boosting the confidence of consumers and investors, who now have high expectations in the next few months as they look forward to reenergised lending and fina