Dubai to see upward trend in second half of 2014

Amush Malik, 19 August, 2014

In what can only be seen as good news for the Dubai property market, the latest report from global property consultancy Knight Frank states that owing to a combination of factors, the residential real estate market of Dubai is likely going to follow an upward trend in the second half of 2014 after a sluggish first two quarters.

Haider Ali Khan, the CEO of UAE property portal Bayut.com, had also suggested in April 2014 that such a trend would be witnessed in the second half of 2014. His estimate that the summer holidays would see a steady flow of investors and property buyers eager for a good deal seems to have been on the money.

In the context of the catastrophic crash of 2008-2009, Dubai's recovery has been nothing short of amazing. Over the course of the last year, Dubai has received increasing warnings from the International Monetary Fund (IMF) that the market is overheating, but Khan remains positive and optimistic that Dubai will continue with robust growth in its real estate sector.

"The current boom is demand-driven and the market is much more stable this time around. The government of Dubai has also taken it upon itself to ensure that there is no repeat of 2008, so the laws are stricter and clearer. For all intents and purposes, things are purring along nicely," says Khan.

The Dubai of 2008, says Khan, has hardly anything in common with the Dubai of today, which is much more mature. "This boom could last longer than anyone expects, and the results of that would be excellent for Dubai. This is a market that has learnt from its mistakes and the casualties of 2008 are beginning to bounce back," he adds.

One of the major victims of the crash, Nakheel Properties, is quickly repaying all its debts and it is doing so ahead of time for the most part. Once close to default and forced to restructure its debts, Nakheel Properties now plans to repay all its outstanding debts to banks by August this year – four years sooner than mandated by its restructuring plan.

Thanks to the strong recovery of the real estate market, prospects have improved for Nakheel (over the past two years) who is now planning to repay all its outstanding debts to banks by August this year. This means that the developer of the palm-shaped man-made islands is actually paying off all its debts four years ahead of the schedule mandated by its restructuring plan.

"Nakheel has made its way back into the market on the back of booming sales of its property units last year. I doubt that that sort of success paints the picture of a sick market. The real estate sector of Dubai is on the rise, and the only thing that remains to be seen is how high it will go," says Khan.

Tags: Dubai | law | International Monetary Fund (IMF) |

 

 





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