People love to hack on Dubai, but Dubai is fast again becoming more attractive with lower prices on housing etc.
Dubai experienced extreme growth up untill September 2008. Now like everywhere else the credit crunch is having its toll and the economy is cooling down fast. A lot of people love the fact, that this crazy place, where nothing was impossible and where growth exceeded normal expectations is finally showing signs of being “normal”. That’s right – Dubai has a huge real estate price correction like everywhere else.
To be honest, Dubai had become to expensive to fast. People on average income and kids no longer saw a economic benefit of staying in Dubai. Instead they went back home to countries like Sweden, where great education and health care is free. For a family with one income and a couple of kids, things just didn’t make financial sense anymore.
Another thing was the real estate boom. It meant that a lot of people made a lot of money very quick. This money went back into renting nice big villas and buying big cars. Many of the nice homes on Palm Jumeriah was rented be real estate sales people. With the credit crunch and the bubble deflation all this money disappeared and really took the pressure back of the prices on pretty much everything – especially real estate and hotel rooms have become a lot more affordable. In half a year some Villas have dropped more than 50% and the same with hotel prices.
This is good news for everyone that wasn’t making their living from the real estate sector. I feel sorry for the people that don’t have the same fortune anymore, but for the rest it means that Dubai right now fast is becoming more attractive again. Okay, so it might not be 2004 or 2005 prices yet. There is still some way to go. But the way prices are falling right now, then probably in 2010 Dubai will again make a lot of sense for a lot of people to live in. When that happens real estate will again start to become an attractive investment and the cycle can start over again. Hopefully we all learned something in the mean time.
Dubai Marina with Jumeirah Beach Residence and Palm Jumeirah in the back ground has become a favourite place to live for expats in Dubai.
