Speculators Returning to the Dubai Market

Gulf News Article

Speculators Returning to the Dubai Market

I’ve decided that people in general have short memories when it comes to financial cycles and history. They seem to have forgotten that there was a near cataclysmic property price fall out across the majority of the World and particularly in Dubai, where we witnessed prices fall up to 90% in some asset classes and areas. In August of 2008 many saw the Dubai property market as impregnable and robust, strong enough to withstand the Global meltdown going on around it. Clearly they were wrong and overnight the faith and confidence which once washed over the top of the Dubai property market was gone. In hindsight I ask myself why we couldn’t see this coming. The lack of depth in the market was staggering; there was no substance to it. A week in the Dubai property market was as volatile as a week on Wall Street, as apartments and villas seemed to trade as frequently and as rapidly as stocks and shares. It became clear that for many, there was an obsession with short term gains at the expense of long term security.

For any property market to function naturally and sustainably there must be a backbone to it, a backbone of established demand that keeps it propped up. In most markets around the world, people view property first and foremost as somewhere to live. ‘Owner occupiers’ is something of a new term in Dubai, but it defines a demographic who, when purchasing property buy for inherent personal reasons and not for the short term benefits. The word ‘investor’, is banded around so frequently these days that everyone thinks they’re property experts who will undoubtedly make a killing on their next purchase. Unfortunately we all know that this mindset can come to an abrupt holt, and quite swiftly for that matter if we aren’t buying for the right reasons. If an individual is looking at an apartment purchase with an investment mindset to flip, they’re buying for the wrong reasons in my opinion. Sadly if...