Dubai's property sector treading on recovery path

DUBAI: Dubai's property sector, which went into free fall when the global financial crisis hit, looks like it might be on a path to recovery, with prices starting to bottom out and a few developers daring to roll out new projects.

At the annual Cityscape Global show, which served over years of property frenzy as a launchpad for grandiose projects, a handful of developers displayed scale models for seaside and desert developments to test the appetite of the market.

The three-day international show began on Tuesday.

"We have seen demand increasing since the beginning of 2012," said Mohammed al-Khayat, commercial director at Meydan Group, owned by Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, as he unveiled proposed new projects.

"The market is picking up... There is a heavy traffic of tourists. Many from Saudi Arabia," he said, adding that many tourists with time decide to buy secondary property in Dubai.

Property prices in the glitzy emirate took severe beating when the crisis hit, shedding more than half of their peak values registered in mid- 2008 after five years of breakneck-speed growth fuelled by speculative investments.

But investors are back on the look and have pulled prices up in different areas.

"We do see a recovery. It is a selective or partial recovery and certainly not across the market," said Craig Plumb, head of Middle East and North Africa research at Jones Lang LaSalle property services firm.

"There is always a room for new projects, but we are a bit concerned that people are getting carried away. There is still a lot of supply in the system and it is still coming on. I think a new project has to be well targeted at a particular niche," he said.

By AFP