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.
However, for the past 2 months, since the credit crunch and after the economic crisis in the West manifested in October 2008, price growth has slowed down and many areas in prime Dubai have seen reductions in prices.
The biggest worrying factor is that transactions have gone down by over 70% and the market is shifting from people wanting to buy property to those wanting to sell property.
Many analysts believe this will be short-lived as the underlying economy in Dubai is strong, and that this downturn may give wise investors another chance to buy Dubai property at a good price. We believe this to be the case, but in the context of what has happened with the world-wide financial crisis, it is difficult to be certain about anything.
Even money in banks is not safe anymore!