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Dubai To Live Or Die In 2010
January 19, 2010Article by Ray Withers
The first quarter of 2010 is set to be an exciting time for followers of the Dubai property story. There is a mountain of evidence to suggest that prices will either stagnate or continue falling all year, not least the massive oversupply of apartments, commercial and retail spaces. That said: prices rose in the third quarter of 2009 and some are saying that represented the beginnings of a turnaround.
So, it looks like this, the first quarter of 2010 will determine who is right and who is wrong, a: because it is when 4th quarter results will be revealed for 2009, and b: because depending on what the Q4 results say a rise in Q1 2010 could solidify the beginnings of recovery.
One thing is for sure, if media coverage could bring recovery to the Dubai property market, then recovery it would have after this month saw the official opening of the world’s highest tower the 808 metre Burj Dubai. Of course whether or not it would have received the same level of coverage were it not for the state of the Dubai property market in which one of its largest developers has already squealed inability to pay its debts and been bailed out by big brother Abu Dhabi is another story.
Speaking of Burj Dubai and Dubai’s chance of recovery, apparently all 1000 of the tower’s apartments sold at prices well above what the market would bear, but that is hardly surprising.
The positive wave that comes off Burj Dubai could be used as the starting block for a complete overhaul of the emirates’ global image, and if that is done and done well then the recovery could begin in the second half of this year, according to international property investment consultancy Property Frontiers.
A spokesman for the firm said:
“Dubai has a massive oversupply. But it is also one of the most advanced business centers in the world and there are still many units owned by celebrities. Burj Dubai will either highlight Dubai’s faults or its prestige, largely depending on how marketing and reputation management is handled from here on out. If Dubai’s marketers can get the prestige ball rolling and get sales back to anywhere near 2007 levels then the overstock would vanish rapidly and the recovery begin just as fast.
“Few too many ifs in there for most people, including me. Another if… the market continues to stagnate while the prestige of the Burj fades into high-rise nothingness then it could be at least 2012 before there is any chance of growth for Dubai property.