Has The Dubai Property Market Correction Ended?

It is now pretty well established that for the past few months the Dubai real estate market has been undergoing a sharp price correction, some might go so far to say a property crash with the recent news that prices in some up market luxury villa developments have fallen up to 50% in the last quarter of 2008. Things certainly are gloomy, with investor confidence at an all time low and no one really sure how long it will be before prices reach their bottom and things can start to improve. There is still some confusion to how bad the situation really is at the moment with conflicting reports from the media not helping clarify the situation. However there is mounting evidence that things in the Dubai property market are certainly not what they were a year or two ago. Despite some developers recently coming out to reassure investors that all projects were going ahead as planned and on schedule, these developers now look to be in a minority given with the latest new coming out of Nakheel.

The Dubai government backed developer is reported to be in talks with banks and lending institutions with a view to securing finance to insure the future of one of its headline projects. Both The World Dubai and Jumeirah Gardens are said to have run into financing issues of late. Nakheel, the developer behind the likes of the Palm Jumeirah and Jumeirah Village is said to be looking to obtain finance for some of the sub developers at the World who are having problems making payments whilst others don’t have the necessary finance to begin construction on their projects. Nakheel is therefore keen to keep things moving at such a high profile project, and will hope those developers who have already taken possession of islands will be able to proceed as planned.

Things at Jumeriah Gardens look even grimmer. Developer Meraas has already announced its intention to scale back the massive project but with the news that those people who has previously lived in the projects intended area and had been relocated, have now been allowed to move back to the area, the future of the project is up in the air. With the affects of the global financial crisis now really being felt here, what happens next with the project is anyone’s guess. These are testing times for Dubai properties and developers.       

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