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Dubai’s properties need people
The emirate’s real estate sector can only pick up if Dubai’s population grows, says a new study. Transparency and better customer service are also essentials.
January 11, 2010 12:35 by Aarti Nagraj
Dubai’s real estate market is facing a massive oversupply, and will need a quick growth in the emirate’s population in order to recover, according to the latest report released by property broker Harbor Real Estate.
“In 2010, oversupply will be an issue in the market. An estimated 60,000 residential units and 30 million square foot of office space are coming on stream by the end of 2011,” the report said, adding that Dubai Marina and Jumeirah Lakes Towers alone were expected to see around 10,200 new units in the next two years.
Dubai’s population declined between 5 percent and 8 percent in 2009; the city will need to see a growth in its population to increase property demand and “kick start the industry again,” the report said.
It’s also not going to be easy to attract existing investors. Demand last year was dampened by the lack of available credit and the tightening of lending rules by mortgage lenders. In 2010, investors are expected to be extremely cautious, the report said.
“Gone are the days of the easy sale to the investor. Simply put, many people have been hurt by the real estate price correction. In effect, they have developed a risk aversion, which will take some time to overcome,” it said.
One of the key things essential to increase the confidence of consumers in the market is to increase transparency, the report said. Currently, laws and regulations about disclosure are limited.
“Investors, especially those from overseas, need to feel that their rights will be protected and, in case a dispute arises, resolution will be equitable, accessible and timely,” the report said.
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