The Rise And Fall Of Dubai Property Market: Abu Dhabi Property Market

Prior to 199 the right to purchase property in Dubai was restricted to the citizens of Arab states that made up the Gulf Cooperation Council (GCC). However, in 1999 when new residential and commercial projects was launched, the Dubai Government decided to open selected projects to foreign investment.
The policy makers were of the view that this measure would open doors to international property investors from France, Spain, the UK and US. They were right; and people from all over the world, including Pakistan, invested in the Dubai Property Market.
The peak period started in 2002 and saw Pakistanis invest more then US$10bn. According to the data available, 3290 property unites were booked by UAE nationals, 3243 by British nationals, 2510 by Pakistani nationals and 2450 by Indian nationals.
The third quarter of 2008 saw the Dubai market slump to unprecedented levels. This was due to a number of reasons including surplus supply, the hike in property prices, negative population growth, lack of mortgage facilities, defaulting buyers and the cancellation of many building projects by builders. By the end of 2008, foreign investors had disappeared from the Dubai market due to the global economic crunch.
Ever since, the glut in residential and commercial property has compelled owners to slash prices by more then 50%. Yet this too has failed to lure investors back, as they are anticipating a further decline in Dubai property prices in 2011.
TO make matters worse, the Dubai Government recently announced the imposition of a five percent tax on residential units and a 10% property tax on commercial units. This is in addition to the one percent transfer fee based on the selling price that is payable by the seller and purchaser of the Dubai property. Such taxation measures are bound to reduce the number of transactions taking place.
Stay in touch for the second part of the feature.