Dubai property market 'to recover in 2011'

source Arabian Business

Dubai property prices and rental rates are likely to start recovering in 2011, following a period of stabilisation in 2010, a global real estate firm said on Sunday.

Jones Lang LaSalle sees 2009 as a year of correction for Dubai’s property market amid the global economic downturn, with the emirate likely to be harder hit than other markets in the region due to its greater integration in the global economy.

“The impact of the global economic crisis on real estate markets in the GCC has been both sudden and dramatic,” the firm’s analysts wrote in a research note.
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“While other markets across the region are likely to witness a similar shape to their cycle, the timing and magnitude will be somewhat different to that experienced in Dubai.”

The GCC real estate markets have come under increasing pressure as banks across the region stop lending in a bid to reduce their exposure to real estate, while developers are being hit hard by defaulting buyers and a debt market that has dried up.

But, Jones Lang LaSalle said that the downturn also presented significant investment opportunities - picking out the Abu Dhabi commmercial sector, middle income housing in Dubai and Saudi and Qatar as good options.

“Evidence from past corrections in other markets suggests those that act decisively during the downturn are best positioned to benefit from the subsequent recovery phase of the cycle,” the analysts said.

“Among the markets and sectors where we see continued opportunities for investors are the commercial sector in Abu Dhabi, middle income housing in Dubai and the Saudi and Qatar markets that have been less impacted by the global turmoil than others.”

The firm sees potential for other property markets in the region to experience a return to growth in 2010.

However, Dubai was likely to remain “handicapped” by the high levels of new supply until 2011, it said.