Two in three still want to buy Gulf property
DUBAI - About two in three people are likely to buy property in the Gulf in the future despite a sharp decline in trustworthiness in the region, and one in two believe prices will decline further, a new study released on Tuesday showed.
Nearly 70 percent of the respondents in the FutureBrand Gulf Real Estate Study said they believe property prices in the region offer good value for money at current prices.
"People believe there are deals to be had in the region. When you look at these numbers, we wonder if this is a turning point in sentiment," Jae Hwang, executive director at FutureBrand Dubai, told Maktoob News.
The FutureBrand Gulf Real Estate Study surveyed 200 recent and prospective home buyers in Saudi Arabia, Qatar and the UAE. Part of the data also came from a study done by REIDIN.com, a real estate consultancy.
Real estate prices in the Gulf have suffered in the economic downturn. Dubai's property sector has been decimated, with prices falling more than 50 percent in some areas from their 2008 peaks. Experts predict a further fall in 2010.
Despite the negative publicity Dubai received last year for its property crash followed by its debt woes, the survey found that it is still the most desirable location in the region, with 43.5 percent of respondents saying it was their preferred location, up from 36.1 percent in 2008.
Nearly one in two survey respondents said they were more aware of risk, loopholes and corruption now than in 2008, when the previous survey was done.
Nearly 23 percent said they were less likely to buy or invest in the region again. And 25 percent said they were disappointed with the way the region responded to the financial crisis.
"There has been a noticeable deterioration in the trust factor across the sector," Hwang said.
The report found that Emaar, developer of the 828-metre Burj Khalifa, the world's tallest tower that was inaugurated last month in Dubai, was the most reputed developer in the region among nine names.
Fifty-six percent of respondents gave Emaar an excellent rating, followed by 41 percent for Abu Dhabi-based developer Aldar.
However, in the 2008 survey, nearly 77 percent of the respondents had given Emaar an excellent rating.
Hwang said that one cannot conclude that majority of people are looking to buy homes in the Gulf in the future because they believe prices will fall further, despite what the data shows.
He said the expat mentality of the past, where the Gulf, mainly Dubai, was a three to five year in-and-out stint, may be changing and probably being reflected in home buyer attitudes.
"What we are seeing now is turning point. A lot more people are seeing whether this is becoming a viable place as a long-term destination or even home."
