Correction or Crash? Middle East jitters hit the property forums

With some alarming property price falls in Dubai and jobs cuts now being announced across the real estate sector it is no wonder that the situation in the Middle East is being actively discussed on the property forums this week.

'Correction or Crash?' screams one post on the forum and there isn't much optimism about. Several people make the point that as the downturn is global there is no way Dubai, or the rest of the region, was going to be exempt from the credit crunch.

The banks in the Middle East aren't exposed to the same kind of problems that they are in other parts of the world but with stocks and commodities crashing, unemployment rising, and no liquidity in the markets, it isn't a great time to be an investor of any kind.

Boom is followed by bust, is what some analysts have been saying for some time. The key question for the Middle East, and Dubai in particular, is whether a big boom will translate into a big bust?

One poster, shasherwani2 predicts that it is going to be a big bust. 'We aren't even close to the rock-bottom, in fact the journey down has just begun!' he writes.

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Others predict 'an intense correction' and point out that good quality developments from good quality developers in good locations should be okay. However a number of less well finished projects where prices have shot upwards as part of the general boom could see large price falls simply because they should never have achieved such high prices in the first place.

Spring next year is mentioned by several posters as the point when the crash could happen. This is when the quarter 1 results of the large property companies will be published and few predict them to be happy reading.

The optimistic view is that the Middle East is actually the only safe haven for property investors. Another poster suggests that as people lose their jobs in the UK, US and Europe they will look for jobs in Dubai and other parts of the Middle East. They will move and will need properties.

Another area of concern for many property investors is projects being halted, delayed and even cancelled. It is easy for rumours to start on property forums and not always easy to check out the details without going to the companies concerned. But certainly a number of concerns are being voiced on the forum.

Central Park Prague is mentioned although it is difficult to assess the situation fully as some apartments are on different completion schedules to others. Also of concern is the tightening of lending conditions and a rise in lending interest rates.

Cyprus could be the answer for property investors who are feeling a bit down. According to a post on the forum a number of property groups including the respected Royal Institution of Chartered Surveryors are indicating that Cyprus is 'shrugging off' the gloom and is in a better position than many locations to survive the property slump.

But like many things in life there are always two sides to any argument and other posters paint a less rosy picture of the property market in Cyprus. They claim that it is a buyers market as developers have thousands of unsold properties on their hands and misleading advertising is rife. One real estate agent near Larnaca is offering free golf course membership as an incentive but the golf course doesn't have planning permission yet.

Another big issue for the island is water. A huge increase in new developments in the last few years has put a serious strain on water supplies and it is rationed in some areas. However three new water desalination plants are at various stages of construction so the situation is being addressed. But another poster with property in Cyprus talks about the water being cut off every other day.

There are also legal concerns about title deeds and you can find more information on the situation in PropertyWire's features section. It would certainly seem that buying a property in Cyprus with a swimming pool might not be the best option at present.

It has nothing to do with property but a posting on the site has to get the vote for most amusing on the forums; Man with moustache passes through Edinburgh Airport security on woman's ticket. A passenger managed to get through airport security using a woman's ticket – despite being bald and having a moustache. Alistair Buchan, 49, got through checks at Edinburgh Airport despite his ticket having his sister's name, Angela Fisher, it was reported today. The pair flew to Majorca for a holiday, but Angela mistakenly booked both tickets in her name.