Property Prices in Dubai Soar - And Set to Soar Higher
With the loosening of monetary policy in the US as a response to the collapse of house prices, and the price of oil topping $128 a barrel, Dubai property prices are beginning to soar.
A reported price gain of between 10 and 15% in the past 60 days (a figure which could soon double) sends a very positive message to the worldwide property investment community. This is probably the highest rate of change in Dubai property prices since the Dubai freehold property revolution began in 2002.
The collapse of house prices in the US, the recent sub-prime mortgage crisis and the Federal Reserves lowering of interest rates has had the side-effect of pushing up commodity price inflation, most particularly in the oil market. For an oil-exporting emirate like the Dubai this means huge additional liquidity flooding the banking sector with money supply rising to 37%.
The UAE has its currency pegged to the US dollar. This means that the nation has to track US interest rates downwards, causing interest rates to fall at a time of rising inflation, basically meaning the economy is effectively paying you, the property investor, to borrow money. Is it any surprise then that Dubai property has seen a huge dislocation of funds, further increasing property prices?
With Goldman Sachs predicting oil prices pushing upwards to $150-$200 within the next 18 months, we at Sandcastles would suggest that investors looking at properties for sale in Dubai could see a good return on investment due high property prices being obtainable and more than likely sustainable at least within that timeframe.
With the Dubai property market still forecast to grow then what more reason do investors need to invest in Dubai property
May 22nd, 2008 - Posted in Forecasts, dubai property | |
