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Dubai property industry hits back at dramatic price fall predictions



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By : David Garner    99 or more times read
Most property analysts are in agreement that some kind of price correction is on the horizon and are welcoming of a slowdown of property speculation. But the property industry believes these predictions are far too gloomy and are quick to point out that demand is not going to suddenly disappear from the market.

Last month (Sept. 2008) Morgan Stanley released a report predicting at 10% drop in property prices by 2010. Then last week EFG-Hermes, an Egyptian investment bank stated that property prices in Dubai are set to slump by 20% 2011.

However representatives of the Dubai Land Department believe any market slowdown will be much less severe. Sultan Bin Butti Bin Mejrin, DLD director general said; 'In 2007, they said prices would go down. And the recent reports say prices will go down. But I said then it will be a very strong market. And it is.'

RERA, the Dubai Real Estate Regulatory Authority is remaining positive. CEO Marwan Bin Galita said; 'There will be a correction in some places but a correction in profit only. Rather than making 20% profit, maybe investors will make 5% profit. What have they lost?'

There will undoubtedly be some opportunities for investors, making a 200% return on investment in a matter of a few is not an investment strategy driven by market fundamentals such as demographics and economy, but a strategy that is driven by psychology and excessive speculation.

Property investors taking a more sensible long term view of their property investment can still achieve excellent returns and strong profits. Doubling your money in two or three years will not be as easy, but good solid profits are still available, providing you adopt a more sensible long term approach to the market.

The basic property market fundamentals that have made Dubai an attractive market for property investors are unlikely to change in the short or long term. The popularity of the Dubai property market is related to lifestyle Dubai offers, it's strategic positioning in the Middle East and it's tax free status. None of that has changed.


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