Hard Times Ahead for Dubai Property Market

Property markets have suffered all around the world. In the past year or so, we have seen companies leaving swanky offices and moving to small offices, and worse, hundreds of companies closing down. This has left thousands, possibly millions of square meters of office space and millions of residential properties around the world standing empty.

Dubai is like a microcosm of the global crisis: in the most happening city of the world, signs like "shop on sale" and "house on sale" are now as common as foreign nationals once were, the latter having all but vanished. The property market has been worst affected.

It is learnt that Emirates' construction has put most of it projects on hold for this year, and the worry is that the mass exodus will leave properties that have been completed wither empty or languishing on the resale market with continually falling asking prices. All in all, the outlook is bleak for Dubai real estate, and Dubai as a whole.

The question is, just how far can prices fall? The construction materials used in these developments must put a floor on it.

Dubai was built by wealthy emirates, who used their oil wealth. So the downturn is unlike to bankrupt them. But what will they do if they drop prices to this floor and the properties still are not selling?

And the biggest question: having seen the catastrophic collapse of the Dubai property market, how can foreign buyers; the lifeblood of the Dubai real estate market, be lured back into buying.