Dubai not 'insulated' from property slowdown

A number of analyst reports released recently have said the market in Dubai will see prices slowing down, with a correction of about 15% in 2010. Imran Shaikh said that elements of the market are already slowing down.

Describing the rapid rise in prices over the past few years as 'unhealthy' for the market, he said: 'We need to be aware that we are isolated in Dubai but not insulated [from the global downturn].

'I believe the market has now reached the point where price stabilisation is occurring. I believe we have entered a correction phase and it is needed in the market, because you have a large section of people who would like to buy a home but can't afford to. There needs to be some equalisation in the market,' he told AME Info.

Currently in Dubai there is not enough property aimed at middle income workers, but Shaikh pointed to the rising price of land and construction costs, plus the desire by developers to then add in their margin of profit for the costs increasing. 'Developers need to look at their end sales price and work backwards,' he said.

Speaking at Cityscape earlier in the day, Dubai Properties' Jade El Khalil, Chief Officer - sales and marketing, said the Dubai market was now maturing, which would potentially see consolidation among some real estate developers and prices stagnating or even a small correction, but that overall confidence remained high.

Shaikh agreed, adding: 'The flipping game in my opinion is now over and that's a good thing for the market.'

Sanctuary Falls, itself an exclusive development of 96 villas on the Earth golf courses, is scheduled for completion in March 2010. But Shaikh said that those properties that face the golf course will have been landscaped and completed externally by the time the final round of the European Gold Tour, The Dubai World Championship, takes place in November 2009.

The development was launched in 2007 and 70 of the 96 villas were sold at last year's prices, costing between Dhs8.5m and Dhs21m.

Shaikh admitted the huge price hike experienced in the Dubai market over the past year was unexpected, and said the 10 properties being showcased for sale during this year's Cityscape now cost between Dhs14m and Dhs35m for villas of between 5,600 square feet and 10,600 sq ft. The final 16 properties will be sold once the development has been completed.

Shaikh Holdings is looking to launch two new developments, in Abu Dhabi and Dubai and wants to expand internationally. In Dubai, a low-level, 10-storey tower is being designed for the Waterfront, Nakheel's master-planned community.

Shaikh said the company wanted to 'do something special with the building', making it feel like owners are 'in a house even though they are in an apartment', but would not reveal details. The project will be formally announced early 2009.

Internationally, the company is looking at Bahrain and has had discussions with a 'possible' joint venture partner in Turkey.