Dubai feels pressure of global crisis in realty sector

The financial pundits did assume that the global economic crisis and the disaster of the realty sector (as a consequence) would be unable to make Dubai vulnerable to their forcefulness. The only reason of this strange expectation happened to be the impregnable or secure realty sector of the country. However now it seems that reverse is taking place (if we look at the present statistics) and the impact of the global financial crisis has started to take its toll on the real estate sector. What has made people realize this? Well, there are some aspects, which are pointing towards this stark reality.

The first of them happens to be the surge in the number of homes advertised for sale in the realm of Dubai. This has been regarded by a section of observers as a premonition since the property prices in Dubai did rebound in the month of November. What has led to this sudden development? According to the estimation of HSBC Holdings, the shift of investors to smaller units has been responsible for the gaining of 4% in the advertised prices of properties. What’s more it has also been opined by the bank, that prices in Dubai may be reaching a decisive moment in the midst of growing concerns over job security, stock market losses and a shortage of liquidity in the emirate.

Well, this is quite unexpected and unimaginable to many since real estate happens to be one of the foundations of Dubai and is responsible for the development of 30% of the Emirate’s economy, if not more. It has played a glorious role in the recent years thanks to its decision to allow the foreigners rights to buy property for the first time six years ago. Only one specimen is enough to depict the real picture. You may not believe but it’s true that advertisements for properties in the area surrounding Burj Dubai, the world’s tallest building, almost doubled to 670 listings between September and November.

There may be several reasons behind this eventuality. One of them is that accession to finance may be hampering sales as lenders either pull mortgage finance for buyers in Dubai, or require bigger deposits. But it’s definite that the crisis has set in and Dubai is feeling the pressure.