Following the price crash which happened over one year ago at the end of 2008, many are wondering if Dubai will ever recover.
Now at the beginning of 2010, Dubai prices are rock-bottom and there many different views as to what is likely to happen. One view envisages Dubai prices remaining low for 2 to 3 years before a recovery that would see prices gradually returning to the peak 2008 levels by 2015. This is summarized in the chart below and is the most likely outcome in our view.
However, others think that recovery may actually start at the end of this year with prices growing again in 2011. Generally most forecasters do not envisage prices going down even further from the current very low levels.
The past 12 months have been worrying for many Dubai property investors. Property prices have fallen by over 50% and many off-plan projects (for which customers have typically paid 10% to 40% on a payment plan) are severely delayed and on hold.
Here is the Timeline
Dubai property prices have been rising ever since we have been involved with Dubai property. Whilst everyone is routinely warned that property prices in general can go down as well as up – no-one ever imagined that this would happen in Dubai (and that includes us).
From early 2003 to 2007, the Dubai property market has grown every year. Property prices increased 2.5 fold during this period with average annual increase of over 25%.
Over the 12 months from September 2007 until September 2008, property prices increased by over 40% due to intense demand from investors all over the world. Prices on off-plan property in neighbouring emirates such as Ajman and Ras-Al-Khaimah also increased by similar percentages.