Last year Dubai iwas in the news for reasons that are not flattering. The fact was that the debt crisis of 2009 started as Dubai World Conglomerate announced that it could not service its debts.This default has to be visualized in the background of spectacular megalomaniac projects like the highest building in the world. The initial debt was only of $22 billion which by itself is not much and a $10 billion life advance from Abu Dhabi helped out.
The question which is on evry investors mind is as to how stable are future investments in Dubai. Obviously the debt crisis has ignited a fall in real estate prices. This was expected and in some cases property prices have fallen by nearly 50%. Thus individuals who bought property at the high rates last year are burdened with a unviable mortgage. For such people the temptation to sell is great but I will advise all such investors to hold on and not sell as prices are bound to satabilize..
This fall in real estate prices however is aGod send opportunity for a new investor. He has a chance to pick up property at a discounted price up to 50%..Dubai prices had peaked in mid 2008 and now in 2010 the market has crashed. The Dubai construction giants have postponed new launches and ongoing projects are on hold. A few projects are also cancelled. Thus it is an ideal time for an investor to pick up discounted property for a future profit.
This crash in Dubai has came at the wrong time as the Dubai government had allowed expats to buy property in Dubai. However the balloon air has gone out and it will be some time for the old buyouncy to come back..
However despite the fall in Dubai economy there is a silver lining and that concerns the excellent infrastructure available and a thriving tourist industry.There is thus a good chance that the Dubai economy may yet be revived. Investors of property may reap a good harvest in the years to come.