Dubai the once business hub and God of dream projects in real estate market in now facing a serious catastrophic break down. Property prices in Dubai is dropped upto 48 percent since last year and another 20percent is expected shortly according to research firm Colliers International.
Dubai has not been able to find a solution for the Economic crisis which it has been affected with. Due to this the prices are falling quickly as demand is much smaller compared to the supply of completed developments.
It has been observed that the house prices in Dubai has already reduced to 60 percent and it is set to drop another 10 percent since the supply continues to outweigh the demand. ?The downward trend is unlikely to change in the short term due to further prime stock entering the market across a number of key landmark developments in the second half of the year,? said Elaine Jones, the Chief Executive of Asteco.
Dubai?s most prestigious projects, the three palm shaped artificial islands are also affected by this financial crisis. It has been reported that out of the three artificial islands only one has been completed and the other two are now been out on hold.
Palm Jumeirah which came to prominence in 2002, when David Beckham and several other members of the England football team bought properties on the palm-shaped island. The subsequent hype helped it to sell out then, but its developers have remained tight lipped on allegations that the players received large discounts to buy there. This act as an evidence that the project started to see its financial failure ever since it?s beginning.
The pace of decline is put at an eye watering 7% per month which is prompting panic amongst many foreign investors that bought into the Dubai property bubble including many of the worlds celebrities as the Mirror reports . With the global financial crunch is prevailing and with no signs of waning in near future, the rents of apartments and villas are set to go down month by month.
Source: Newzglobe, Moneyweek,GoogleNews.