Having had some conversations with local estate agents and one very worrying one with a friend in the banking sector (who is planning redundancies and other cuts on behalf of a major UK bank), property and Dubai LLC are slowing at an alarming rate.
The plethora of property supplements could be taken as an increase of supply as more property is for sale. New projects are relying on foreign investment in a world short of cash. As others look to flip properties to reinvest in the newest and smartest, their properties become harder to sell as the grass root demand dries up. Currently asking prices are not being 100% realised as the choice increases and payments deadlines have to be met and the vendors offer more deals to a more careful/sceptical clientele.
After the positive spin of the massively negative bailouts subside and reality starts to set in liquidity will dry up. Banks already have stricter guidelines for loans/mortgages and LTVs will reduce towards 50-60%. Loan rates will increase as inflation continues to increase and affordability will decrease... properties eventually will not sell. People will begin to default on their mortgages and the banks will have to repossess. Rental demand will increase but so will the supply to the rental sector. As the supply increases the rental prices will decrease deflating the market.
There is no doubt that there are those who have made a killing out of the property boom but that was then, now is very different.
The 'glory days' are over as journeyman says.
Last edited by Marooned; 15th Oct 2008 at 06:08.