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Who’s buying Dubai’s properties?
Although real estate bosses insist that Dubai is unaffected by the financial crisis, we have to ask—who’s buying the properties?
November 11, 2008 1:38 by kippreport
Recent media reports have been spewing stories about how the real estate market in the region has either a) been severely hit by the global financial crisis, or b) is defying the global scenario and continuing to be robust.
Emirates Business 24-7 quotes Nasser Al Shaikh, the director-general of the Dubai Department of Finance today, as saying that a committee consisting of Dubai-based master developers and a few private developers was formed in October this year to oversee and decide on the launch of future real estate projects in the emirate.
However, earlier this week, Mohammed Alabbar, a member of Dubai’s executive council and chairman of Emaar Properties, clarified during the World Economic Forum that there no reason to panic, and that the real estate sector in Dubai will continue to grow. He said that the government has enough money to ensure that business runs smoothly in the emirate, as evidenced by the Dh120 billion it has injected into the economy.
But according to a recent survey organized by DSL Exhibitions, a conference and exhibition company, most UAE residents are not planning to buy homes in the coming year. The study contacted 312 Emiratis and expatriates who have lived in the country for the last three years or more.
76 percent of the respondents said that they would not invest in the UAE during the next year. And out of the 21 percent who said that they would buy property, 35 percent said that they would invest in Abu Dhabi, as compared to 26 percent in Dubai. 18 percent said they’d consider buying property in Ajman.
Therefore, even if the region hasn’t been affected by the economic slowdown, the number of people who feel confident about investing in Dubai’s real estate is declining..
This probably means that property here will be dependent on international investors, many of whom, we can assume, would probably have been affected by the financial crisis.
Recently, Joseph Ghossoub, president of the International Advertising Association (IAA) and founder of The Holding Group also predicted a major drop in real estate advertising revenues in the Gulf next year.
So, are Dubai’s real estate bosses worried?