Dubai Property Market Crash

By: Nadeem_Walayat
Whilst the US housing market crash enters into its third year with house prices down approaching 30%, and the UK house price crash fast approaching its second anniversary this August with average prices lower by more than 22%. The developing worlds housing bubbles have only more recently started to pop, especially following last Septembers financial markets crash in the aftermath of the Lehman Brothers bankruptcy For instance the financial capital of the middle east Dubai that saw house prices during the whole of 2008 soar by 40%, however this masks the fourth quarter reversal that saw an 8% drop that has continued to accelerate during the first two months of 2009 into a full blown crash in property prices. The pace of decline is put at an eye watering 7% per month which is prompting panic amongst many foreign investors that bought into the Dubai property bubble including many of the worlds celebrities as the Mirror reports CELEBS LOSING £80K A WEEK ON THEIR DUBAI MANSIONS

Stars including David and Victoria Beckham, Michael Jackson and Brad Pitt are losing £80,000 A WEEK as their luxury Dubai villas crash in value.

Celebs who bought the properties in their droves over the last few years have seen prices halve, with pads worth £3.2million in October now on the market for £1.6million.

Already some of the mainstream press's property sections are implying the fall in prices is a great time to buy i.e. the Property Times Online - " For Dubai's fans, this makes it a great time to buy."
A warning to those investors being swayed, the Dubai property crash has only just begun which seeks to correct a 6 year property boom. The Dubai construction boom is expected to come to an imminent halt with many partially finished projects littering the landscape as investors walk away from the off plan deposits in the wake of the ongoing crash in property values. It remains to be seen how much of this excess supply will eventually be reclaimed by the desert as many foreign investors in off plan Spanish properties are painfully experiencing. My expectations are for an average 50% retracement in Dubai property prices from the peak, with many of the more over-leveraged high end properties possibly crashing by as much as 75%

from - http://www.marketoracle.co.uk/Article9297.html