From our studies of the property market, our research and our continued review of property supply and demand, Asteco’s comments are as follows:

We believe there are a number of factors and strong indicators in the Dubai property market that bode well for the next 18 months to 3 years during which period we do not see a downside in the property market. To look further ahead than this is extremely difficult.

We do not see anything other than a possible leveling of either rental or sales values at worst and then not until the end of 2010 at the earliest. Our rationale for this is the enormous demand for any project either commercial, residential or industrial that is ready for occupancy now, with waiting lists for most types of property becoming longer.

* We are seeing a continued strong take-up of projects being released to the market. This take up is not so much by short-term speculators but by potential end-users and long-term investors. Both these groups help underpin the market.

* Completion of many major projects have not met initial dates slated, but have seen delays due to the well-documented shortages of materials, skilled labour and to a lesser extent, delivery of utilities. Whilst not our area of expertise, we would also note the positive signs from economic indicators in the Emirates that show continued growth and confidence in the market, despite the economic problems in many other parts of the world.

* Underpinning the property market has also been the improvement in the property market “transparency ratings” for Dubai.

* The recent implementation of a number of rules and regulations that raise the property market’s credibility and also the interest of international investors and funds looking into this market include:

Registration of free-hold title with Land Department.
Strata Title/Condominium laws.
Real Estate Regulatory Authority.
Requirements by developers to use Escrow accounts for sales proceeds and reach certain criteria before releasing projects for sale.

All are now operational and actively implemented to international standards.

These factors, amongst others, will all attract interest and investment to property that is still good value on the International market.

source : Asteco