After years of being hyped as the new global economic powerhouse, Dubai is now facing a significant downturn in its commercial real estate (CRE) activities.
British news service PropertyWire reports that 217 CRE projects – nearly half of the 450 projects reviewed by Dubai's Real Estate Regulatory Authority (RERA) during the last two years – were cancelled as a result of the emirate's stagnant real estate market. RERA has reported that commercial property prices have fallen 60% in Dubai: The total value of Dubai's CRE property transactions last year was $32.5 billion, down from $41.6 billion in 2009.
The situation is not much better in Dubai's residential housing market: Property prices fell 1.2% in May, while apartment prices declined 1.3% and prices for villas were down 1%.
Dubai's Land Department is placing much of the blame for its real estate problems on surveyors offering inflated property valuations, and it is planning to introduce new rules to ensure accuracy in the valuation process.
(Photo courtesy of Dubai Department of Tourism and Commerce Marketing)
