While visiting the UAE last week, I noticed that Dubai appears to be experiencing renewed growth in its residential property sector.
October 18, 2012, San Francisco ~ Although not out of the woods yet, Dubai is showing the first solid signs of a mini-recovery in projects developed by reputable companies. “Safe haven” status, improved liquidity, the exit of speculators, the Investor Protection Law, and the enforcement of transparency and regulation have contributed to the renewed confidence in the market. Additionally, the recovery is believed to be partly driven by buyers facing geo-political risk and currency depreciation in their domestic markets.
Although $110 bil of debt is still outstanding as of November 2012, Dubai’s rulers have never lacked ambition or confidence in the emirate’s growth. Dubai’s Department of Economic Development has revised the growth rate from 11% in 2007 down to a still optimistic 4% for 2012, although economic analysts predict lower.
High vacancy rates still exist in the commercial market, and they will likely continue for some time due to the extensive inventory.