Dubai Property – Time to Buy?

Dubai property values have fallen (depending who you ask) between 50-70% from peak and at any other time, in any other market, this would almost certainly be  signal to jump in with both feet. But – and this is a huge but – Dubai has probably got a long way to fall before bottom is reached, and our opinion is that we are nowhere near there yet.

Perhaps selected up-market developments that are well established – if anything could be called well established in Dubai – may be an attractive proposition, but the ongoing collapse of the property developers, lawsuits flying in all directions and the willfully obtuse government do not make Dubai an attractive proposition despite large falls in value.

Thorough the year, a barrage of press releases and advertorials written to confuse and disguise the financial problems of that country do not encourage us to take the latest “We have now reached bottom,” versions with any sort of seriousness. These latest press release are all along the same lines and this is a typical example. “Year 2009 was a year of “price correction” for Dubai’s realty market, transforming it into a matured and favorable one for end-users.”

We are not certain who exactly is likely to fall for these types of press release and there is no question prices will continue to fall through 2010. The Dubai property crash is firmly under way; there is an enormous over supply in almost all markets and unless the banks find another magickal $100 billion or so, credit will remain tight.

No bottom until Q4, 2010 and no recovery until 2012 say we.