I believe that there will be re correction of property value throughout the world including UAE. And with this price correction that you have seen in the U.S for example, a lot of companies including banks closed their doors. Similiar to the U.S pattern, due to increase in property values over a small period of time, investors have milked the cow so hard that the actual cow has dehydrated to a point of no return. The cow is in the E.R.....out of business.......Correction in property value is already taking position, sellers have flooded the market with their inventory bringing distressed and fear.
Situation of US and UAE is different. US economy is very weak, and their spending on foreign policy expenditures is more than 1 trillion per year, so govt is spending extensively in two places - war and economy. This is increasing their debt at a very high rate and making it difficult for the economy to recover. Another thing is sub-prime mortgage.
These two are not with UAE, (1) Economy is doing well (2) There is no sub-prime situation in UAE, RERA put regulations in place for mortgages which has avoided sub-prime mortgages
and financial institutions are not in trouble here. (3) Property prices are still lower than Singapore and HK but economy is similar. There is demand here.
What you are seeing is that people who were not end-users bought the property for quick money, now they feel in trouble and flooding the market. I guy could only hold on to 2 properties bought 5 in hope to sell few quickly and keep 2 for long-term. Now many of them doesn't have payments to keep those properties. Buyers who have the capacity to hold them long-term are waiting to see if prices go down further. Situation is reverses, before sellers were waiting if prices go higher, no buyers are waiting if prices go lower. Rise in value of $ has made properties here more expensive for international buyers so that is affecting the demand too.
Now one of 3 things can happen,
(1) prices go down further in fear
(2) people might realize situation here is not so bad here so selling might start again, but premiums with reasonable premiums and more demand for safer property investment.
(3) correction is short lived and you see more funds transferred in UAE market, because UAE is in sound economic position. But these would be long-term buyers rather than short-term. What happened will make flippers more careful from now on.
