Dubai Property Market ‘Is Back’

According to the CEO of Deyaar Properties, Dubai’s real estate market “is back”.

And judging by the crowds that flocked to this city’s preeminent real estate exhibition on Tuesday, it’s hard to argue with Saeed Al Qatami’s observation.

Among the throng of visitors, live entertainment, glitzy video presentations and sprawling model-sized building plans, salesman and investors sat huddled around tables talking all things property.

Organizers say 50% more exhibitors have signed up for this year’s Cityscape than in 2011, while a total of 20,000 participants are expected at the three-day event taking place in Dubai’s International Convention and Exhibition Center.

“The prices (in Dubai) are fair at the moment and we are scouting the best opportunity before prices rise further due to the increased demand we are seeing,” one Saudi visitor to this year’s event said.

During the property boom years in Dubai, the Cityscape exhibition witnessed the launch of some of the world’s most ambitious real estate projects and boasted a guest list of the super-rich and famous. Amongst the razzmatazz of high profile developments like the world’s tallest skyscraper and man-made island communities, participants got the chance to rub shoulders with Hollywood pin-ups like Antonio Banderas as well as sporting legends such as motor racing ace Michael Schumacher as they promoted various developments.

The city’s once booming realty market suffered heavily in the aftermath of the global economic downturn when liquidity dried up and property prices declined by as much as 60%.

But tentative signs of a property sector revival are beginning to emerge.

Reminiscent of scenes regularly seen in 2007, hundreds of investors queued for hours last month to secure apartments in Dubai-based Emaar Properties’ latest hospitality project, one that features a five-star hotel–The Address The BLVD–and includes serviced residences.

According to Dubai’s Real Estate Regulatory Authority, or Rera, total property transactions in the second quarter of the year amounted to 42 billion U.A.E. dirhams ($11.4 billion), up 45% from the same three month period in 2011 and almost double the number in the first quarter of 2012.

“It’s about value for money,” said one potential investor from the U.K. “Compared with parts of London there are some good deals in Dubai. You just have to take a longer view and find a quality developer.”

Market confidence, say analysts, has been buoyed by Dubai’s improving economic fundamentals and reputation as a relative safe haven in the Middle East in the wake of the Arab Spring. Analysts are estimating economic growth of between 4% and 5% this year.

For Emirates Islamic Bank, a Dubai-based lender, having a presence at Cityscape this year was a no brainer.

“I’ve already had between eight and nine mortgage enquires this morning, there’s a lot of interest from investors, particularly international ones,” said one of the bank’s mortgage advisers.

Some market observers warn that the optimism currently on display has the hallmarks of the Dubai’s previous property market bubble. That exuberance grew excessive and many developers and investors were badly burned when dozens of projects were cancelled in the wake of the global financial crisis.

But Mr. Al Qatami from Deyaar is less concerned, saying important lessons have been learnt. “People are mature this time…from both the investor and developer side.”

By TIM FALCONER, 2 October 2012