Price increase across Gulf

It is expected that property prices are going to keep on rising all over the Gulf Coast.

What started out just a few months ago as a minor trickle of worry has now cascaded into being a major waterfall of apprehension for many people renting property in the Middle East.

It started with worries that caused governments in Dubai and Abu Dhabi to move aggressively in order to place caps on rental increases in the New Year, and now it has reached the point where analysts are predicting large scale property price increases over the year 2008.

An executive for the Jones Lang LaSalle Company even went so far as to put a number on the increase, saying that they expect the average increase in gulf coast property value to be in the region of 20%.

Blair Hagkull, the executive in question, went on to say, "With the delays in delivery, the spectre of huge supply continues to be delayed, and you see greater demand…there will also be an increase in labour and construction costs and land prices."

The delay in increased supply has been seen in Dubai, where nearly 80% of the projects scheduled to be completed last year have been delayed into 2008. It has been seen in Abu Dhabi, in spite of the government’s new plans to greatly increase the supply side of their property markets. It has even been seen in places like Saudi Arabia, Qatar and Kuwait. In short, the lack of supply and the overwhelming demand is behind the rapid increase of property values all over the gulf coast.

This news is rather out of the ordinary because it creates an interesting dynamic between these types of reports and reports of renters holding off on purchasing property because they believe that 2008 will be the year that prices finally start to peak and go down in places like Dubai and Abu Dhabi.

Only time will tell which of these two forecasts are correct, but the situation of high demand and low supply is easily viewable across the coast, and that at least seems to point to the projections of people like Blair Hagkull being the correct ones for 2008.

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