Have We Really Learned Nothing from the Crashes in London and Dubai

If there is one thing wrong with global economic recovery getting under way so soon, as well that of various property markets around the world, is that too few people have learned from it. Too many people seem way to eager to go back into the way things were before.

Yesterday the big London estate agency's said they were hoping that banker bonuses would support the housing market recovery in 2010; building another recovery on sand.

Today Dublin based Deluxe Properties has closed a so-called vulture fund, which will now spend £10m of private investor's money on property in Dubai priced between 30 and 50% lower than its original price. The news comes despite the fact that analysts are forecasts a further 20-30% fall in prices next year, and the fact that the consensus of indices tells us prices fell nearly 50% in the first quarter of this year alone.

I've said it before and I'll say it again, just because something is cheap does not make it a bargain, and something needs to change drastically in Dubai if property is ever going to have any true worth again, or certainly any time soon.

Just like the estate agents were going to be perfectly happy lining their own pockets in the kind of banker fuelled market that makes a correction inevitable, Dubai looks happy to fall back into the inevitably doomed cycle of foreign investors selling to foreign investors selling to foreign investors, leaving itself wide open to another dramatic crash should foreigners disappear again.

I have also been seeing a lot of developers and agents offering rental paid finance on their properties overseas, while some of these offers can't fail to do what they suggest many people came unstuck buying into similar dreams in 2007. It seems that we have learned nothing from the crash at all.

That said: according to reports from agents, those currently buying overseas property as private individuals are conducting a far greater degree of research (due-diligence) than ever before. So perhaps it is just institutional investors and estate agents that haven't learned, in which case it is potentially more a case of being set in their ways, and hard headed rather than failure to learn a lesson they should already have known.

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