The novelty of owning property in this part of the world is thankfully over and 2005 saw a growing trend of sensible buying and selling. That is a good thing. You do not see those wild profits from off-plan sales anymore and as speculators take a backseat, serious investors are giving the regional property market a much-needed tweak of correction. The real estate boom on a global scale has witnessed an unprecedented rise in prices over a sustained period, dispelling any notion of a ‘bubble.’
According to the experts, never before have real house prices risen so fast, for so long, in so many countries – from the US, the UK and Australia to France, Spain and China. According to the Economist, the total value of residential property in developed economies rose by more than $30 trillion (about Dh110 trillion) over the past five years, to more than $70 trillion (about Dh257 trillion), an increase equivalent to 100 per cent of those countries’ combined GDPs.
Closer home, it makes more sense to buy rather than rent. Prices, contrary to popular belief, are not overly high. Real estate prices, in Dubai, for instance, remain reasonable by international measures. In 2005, we saw new properties livening up the market, though returns for homeowners stayed at a healthy seven to eight per cent. And it is not just Dubai.
From ‘The Pearl-Qatar’ to the projects in Abu Dhabi worth more than $270 billion (about Dh992 billion), we can look forward to a modern real estate market that will have many spin-off benefits including a growing domestic home finance market in the GCC, estimated currently at a conservative $750 billion (about Dh2,755 billion).
There is no cause to despair if you have missed out on the first round of buying. Experts say that high economic growth, rising liquidity, stable government and legal reform will continue to underpin a vigorous decade of real estate opportunity across the Arab region and beyond.
Source: Gulf News