Categorized | International

Real Estate Market in Dubai Not Expected to Recover for Years

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Dubai’s property market was once booming, and considered to be one of the strongest in the world. Times have surely changed, as the market has plummeted over the last year. Any hope that the market would quickly recover have diminished, as analysts now believe that the real estate market in Dubai won’t see a real recovery for at least another five years.

Oversupply has been one of the primary causes for the severe market decline. The market is not likely to improve until supply and demand equalize. Even after equilibrium in the market is achieved, it will still take years for prices to reach the levels achieved during the previous real estate boom.

The market currently has a twenty-five percent oversupply, and is expected to drop another ten percent before it stabilizes. Other areas in the region face the same struggles, as Abu Dhabi is expected to drop another fourteen percent.

Despite the struggling real estate market in the region, Dubai is still considered to be the safest investment option in the Middle East, as neighboring regions have struggled with political turmoil for the last two years.

Analysts attribute Dubai’s struggling market to the region’s own success. It was once considered one of the fastest growing property markets in the world. Developers and investors flocked to Dubai with the intentions of building more properties. Unfortunately, the global recession changed the outlook of the real estate market quickly, and the abundance of properties recently built was never occupied. As such, the market has since suffered from an oversupply of properties, and will likely face a long road to recovery.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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