For most people there is absolutely no reason to be gloomy about the Dubai Property circus unless prices started to spiral upwards again!
The collapse of the Dubai Property charade was a fantastically positive period for the majority of expats and residents. Those seduced by the “mirage” got hit hard, but that’s life. This market still needs values to fall a further 30-50% before any sort of real recovery can begin. Obviously there are a few decent “eggs” amongst the thousands of rotten ones and this explains why a few pockets of the charade have seen price stability and in some miraculous cases….price rises. But don’t be fooled. Prices will fall.

@Paul King – That’s an interesting hypothesis ! Whilst mostly true, I disagree that prices will fall by 30-50%. Why do think so?

Asset prices in established residential communities are now close to replacement level i.e what it would cost to build them after buying land at today’s prices. Oncoming supply is being quietly and carefully deferred. Banks are liquid and feel the need to lend and make money. Mortgage availability is improving. All these factors do not support a huge drop.

At best a 10% fall followed by a flat curve for the next 2-3 years until dollar linked inflation kicks in and available/emerging supply is absorbed. Then prices start creeping upwards.

@Jag – I have no data, experience etc of your claim that property values are close to replacement costs….but let’s assume this is correct. This gives me more confidence that property values have much further to fall given that the old thinking that property always increases in value is dead and buried. Trees don’t grow to the sky and desert climate property doesn’t continue to increase in value. Older property is in rotten condition and should be treated like an expensive car…expensive to service and maintain and always bettered by the newer models.
No protection, no confidence for investors, abysmal quality, oncoming financial collapse and continued correction, massive over supply, non existing planning restrictions and tough lending conditions will in my view lead to another positive collapse of the entire fantasy! Even Abu Dhabi who hold the purse strings are waking up to the reality with the cancelling and stalling of many high profile dreams. I was at Ferrari World yesterday….my local Tesco Express in the UK is busier!