Property Market

The property market is likely to soften in 2009 unless the global economy is able to recover swiftly. There is an expected downward adjustment in property prices in general, but I believe prices in prime locations will hold out relatively well. A rational property buyer with a long-term perspective would believe that properties in Dubai, Egypt, Panama and Brazil are still at an attractive and sustainable (price), as opposed to a lot of the other cities in the world.

It is difficult to be certain when the property market will pick up again. However, I am optimistic it will ride out this uncertainty over the next two to three years and may return to a ‘boom market’ in the next four to five years. We can draw two important lessons from the current economic turmoil. The first is the immutable fact that we are becoming a ‘globalised’ nation. We have always acknowledged the importance of thinking global in whatever we do, venturing into Global Markets while staying focused in Dubai, UAE; The Middle East and Africa.

We will monitor the market very closely throughout 2009 and undertake in-depth feasibility studies, especially before embarking on new product launches.

Latest Figures showed that the construction and property sector was set to be the worst casualty of the economic downturn in 2009, plummeting by 75% in profitability and 71% in turnover from the same period last year. The figures showed that new construction orders were particularly weak in November itself, diving 38.6% year-on-year.

"With housing market activity and prices likely to remain depressed for some considerable time to come and the commercial property sector in dire straits, the construction sector looks set for extended weakness, despite some support from the government bringing forward some public construction activity and infrastructure spending as part of its fiscal stimulus package", Bondoro Said.

Trevor Bondoro, Managing Director of Sole Dubai Middle East and Africa, said: "Profitability and turnover within the construction and property sector are significantly driven by sales and market value; 2008 was a turbulent year as credit dried up and confidence plummeted, causing house prices and the number of properties sold to fall sharply. The decline in the residential market consequently has had a knock-on-effect on the construction sector, where problems have been exacerbated by huge debts as many proposed developments have been put on hold."

"2009 is set to be a trying year to say the least. Part of the reason for this is the current state of the economy. Lack of available credit will have an adverse effect on the ailing construction and property sector."