2011 has proven to be a year of recovery for the Dubai economy, which has found its salvation through aviation, hospitality, retailing, oil prices and real estate.
During the 40 years since the establishment of the United Arab Emirates, the nation's real estate sector emerged as a key driver of growth for the economy. The city opened its real estate sector to foreign investors in 2002, granting them the rights to freehold ownership of numerous property developments; this resulted in a substantial increase in Dubai’s house prices. According to Morgan Stanley the prices in the Emirates increased between 2007 to mid-2008 by
80 per cent.
In 2009 as the Global downturn continued, Dubai proclaimed a $25 billion debt restructuring of conglomerate Dubai World. This resulted in the collapse of the real estate market, putting an end to a historic building spree in Dubai. The House prices in Dubai hit rock bottom when the market saw the biggest regional collapse in the start of the financial crisis, with house prices dropping 60 per cent from the 2008-peak.
During the 40th Anniversary Year 2011, the UAE government and real estate market regulators in Dubai have been actively taking strides in recapturing the confidence among property investors.
“I believe overall prices have stabilised; I think they are still holding reasonable value to, say, two years ago, so I believe the worst is behind us,” he said on the side-lines of the Arabian Business
Achievement Awards.
A significant step was taken by the UAE federal government in June 2011 to aid the real estate market, when they extended all visa’s for real estate investors from six months to three years. Experts and developers have faith that this will play a pivotal role in improving investors’ confidence and help in the recovery of the Real Estate market.
Another highpoint is Dubai’s plan to implement the Real Estate Investor Protection Law. The anticipation is that the law will offer greater clarity to investors on various topics, such as what steps an investor should take in case a project delays, what procedure the investor must implement in order to cancel the contract when the developer fails to fulfill their contractual obligation etc.
The Dubai Land Department data has also showed that the Emirate signed off 1.603 deals in the 10 months before October 2011, down from the 5.363 deals made during the same period in 2008. When compared to the data from 2009, a clear increase of 37 per cent is reflected, which suggests signs of recovery, this may also be connected with the Arab Spring unrest that has affected economies in the region. Due to this many tourists have been coming to Dubai and some rich Arabs have also chosen to move their business and make Dubai their home.
“We want them all to prosper, we don't want anyone to have a disaster but it’s a fact that it’s affecting the region and investors are looking for safe-haven buys” said by the chairman of Emaar Properties.
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