Changes in Dubai property market signal move towards a mature real estate sector in 2009
A maturing real estate market in Dubai is being hailed as positive by leading property players.
The recent slump in property prices is a change that is welcomed by the Dubai Property Society whose members say it is a move towards fundamentals and will result in the creation of affordable housing and the changing of mindsets.
They see 2009 as seeing a move away from short-term prospecting towards long-term equity investments which is crucial for the future of the emirate's property sectors.
'It's back to the basics for 2009 as the remaining liquid investors flock to traditional investment instruments such as direct investments and ownership of real estate,' said Blair Hagkull, managing director in the Middle East for Jones Lang LaSalle.
'I think 2009 will be a majorly transitional year for the sector. Things will improve gradually in 2010, but by 2011, I expect the sector to be stabilised and matured in terms of return of investments, affordability and regulations,' he added.
The role of RERA, the regulatory authority for the property industry in Dubai will play a significant role in the maturing process according to Ronald Hinchey, the resident partner of property consultancy firm Cluttons.
'Although it has a relatively short history, the real estate sector in Dubai has experienced growth rates far exceeding those almost anywhere else in the world. The expensive, impressive developments seen throughout the city were acceptable until now; however, the new challenge facing Dubai is bringing affordability back into the market,' he said.
'We will see more corrections and regulations, and I think RERA is doing a great job so far. Through 2009, I think the focus will be on solving disputes between end-users and developers, and I believe that RERA should and will continue to enforce a fair game for everyone's benefit,' he added.
A key will be changing the mindset of investors according to Iseeb Rehman, managing director of Sherwoods. He said real estate companies should now focus more on professionalism, quality and innovation in 2009. 'I think that the current financial crisis will help the real estate sector come of age; we will see a shift back to fundamentals with a focus on quality and affordability.'