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Groundhog day

Groundhog day

A couple of things seem certain to happen this year: Property prices will fall further, the Northern Emirates in particular will suffer, and Kipp will write more property related stories.

January 20, 2011 3:17 by

Kipp is thinking about recycling. After all, we’re all supposed to be going green now, aren’t we? That’s what all this World Future Energy Summit stuff is all about. Well, we’ve realized we can do our bit – and save a hefty pile of work at the same time – by  recycling a few old articles.

After all, because life in the Gulf so often repeats itself, we already feel a bit like we’re experiencing Groundhog Day. Who’s going to notice if a property article from last year crops up again this year? Judging from recent news stories, the content is all the same.

For instance, according to Emirates 24-7, the one-time newspaper, the latest expert opinion is that property prices in the UAE will continue their decline through 2011 “as thousands of new housing units enter the market and investors’ confidence remain weak.” This week’s spoilsports are Kuwait bank Global Investment House (GIH), who managed to let us get almost three weeks into the year before hurling a bucket of water on our bonfire.

But as we say, it’s not like we haven’t heard it all before. “We expect another tough year for GCC Real Estate, from a fundamentals perspective. We prefer Saudi Arabia, over other GCC markets, due to its underlying demand fortified by the country’s young population and high absorption of new supply,” the GIH said.

“The UAE will face another tough year … Both Abu Dhabi and Dubai residential markets suffer from the lack of investors’ confidence as new supply of 25,000 units are added to the former and 20,000 units enter the latter pressuring asset prices and yields downwards.

Want more? Think you can handle it? Yeah? Alright, here it is:

“Commercial space oversupply to continue in 2011 as business demand remains feeble in the face of new deliveries. We expect occupancy rates to stay weak in both hospitality markets on new supply and slow business demand.”

Okay, okay. Jeez, you don’t have to rub it in. So the motto is don’t sink all your cash into real estate this year in expectation of a quick profit.

While giving us all a good real estate related kicking, GIH took the chance to big-up Saudi Arabia, too, which it said has a shortage of supply and a pent up demand. That could see a “price escalation of 10 – 15 percent throughout 2011,” apparently.

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