Dubai recovery dependant on global economies

The property market in Dubai is stressed but it is not getting any worse and improvement already being seen in some economies around the world backs up the arguments that it will start to recover in 2010.

Real estate market recovery is very much dependant on the global economic recovery and world economic events, a new report to be published at the end of July says.

The quarterly Harbor Report from Dubai based Harbor Real Estate Brockerage predicts that even though the market appears to have bottomed out it will still take several more months until there is improvement in the market.

'I believe that the market is in a phase of fragile stabilization. It is hard to say exactly when we will see an improvement but the general consensus is that this will be in 2010, although the pace and magnitude of Dubai's economic recovery and its real estate industry will be largely dependent upon the global economic recovery and world economic events,' said Mohanad Al Wadiya, Managing Director of Harbor Real Estate Brokerage and Editor in Chief of the Harbor Report.

The report suggests that even though there have been many positive changes, with governments implementing monetary and fiscal policies, companies restructuring and improving their balance sheets and larger corporations considering mergers or acquisitions, it will still take several more months until we see solid and sustainable improvements.

'When the first Harbor Report was issued in the first quarter the general mood was very sombre. Today it is evident that even though the market is stressed, it is certainly not getting any worse and that in itself is good news,' explained Al Wadiya.

'We are starting to see signs that the changes made by governments and corporate institutions to combat the recession are slowly but steadily taking effect. With economists in Japan, China, USA and even Europe talking about green shoots or early signs that a return to economic growth is now on the horizon, it looks promising that we will see things pick up in early 2010,' he added.

The report points out that whilst the broad consensus is that these major economies will bottom out in the third quarter of 2009, stock markets and consumer confidence indices around the world have risen significantly in the first six months of the year.

'This performance of stock markets around the world, even despite the recent dip, suggests the worst is behind us and we are more or less at rock bottom. The million dollar question is how long will remain at the bottom before we see real signs of sustainable recovery,' concluded Al Wadiya.

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