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Property Sector will Revive by 2010, Say Developers

ABU DHABI — Property sector in the UAE and in many other countries in the region will bounce back from its current lull in 2010, according to leading developers and experts studying the real estate sector.

In fact, many of them see the present set back as a “blessing in disguise” as it would usher in several positive trends like weeding out indiscriminate speculators and ‘fly-by-night operators’ from the sector and creating conditions conducive for the introduction of a balanced pricing system of property units.

According to Edmund O’Sullivan, who is the chairman of the Events section at the MEED Middle East business intelligence group the main contributor for such an optimistic outlook of the property sector in the region is the possibility of spiraling of the oil prices.

The oil price cash can only be a temporary phenomenon; the demand for oil can only go up in the long run, with the growing developmental activities in various parts of the world.

The oil price will definitely go up after some time, say within a year. And the decision of the Opec to drastically cut production by 2.2 million barrels per day will accelerate that process.

The optimists also bank on the possible revival of the US economy with the implementation of the various bail-out steps announced by the outgoing Government there and its elected successor, he told Khaleej Times here.

Replying to questions he however conceded that the level of construction activities in Dubai had reduced to one-fourth of what was prevailing last June last.

The CEO of Bloom Properties Hani Shammah and the Chief Operating officer of the Emirates International Investment Company, Constantin Salameh said the real estate market in the region will revive after the present ‘correction’ as there was genuine end-user demand for the property units here. “The market will now be driven by the end-users. They will be more discerning in future, and will not be trapped by the fictitious projects of the speculators. Only those who had started projects without adequate capital base would now suffer’’

The prices of the property will also slide back to a stable level in the absence of ruthless speculators. The slide in the prices of the construction materials like steel and cement was another factor that could lead to fall in the property prices, the developers said.

· ramavarman@khaleejtimes.ae