Dubai, Oct 2: Indians own the largest number of freehold homes in Dubai after UAE nationals, and many are worried over the warnings on sharp correction in the property market in the UAE. The Land Department has also registered 5,099 plots in Dubai up until now, while the number of owners of varying nationalities has reached 10,872. UAE nationals and Indians continue to be the largest number of home owners.
Morgan Stanley and EFG Hermes both recently predicted a drop in property prices in the next few years and coupled with the global economic meltdown, such pointers have sounded alarm bells among investors in a market driven by speculative real estate investment. While many analysts and reports are predicting a depressing future for Dubai's booming property sector, the real estate officials have stepped in ruling out such a scenario.
''There will be a correction in some places, but a correction in profit only,'' Dubai's Real Estate Regulatory Authority (Rera) CEO Marwan Bin Galita said.
''Rather than making 20 per cent profit, may be investors will make five per cent profit. What have they lost?'' the Gulf News quoted Bin Galita, as saying.
A Morgan Stanley report recently predicted a 10 per cent drop in property prices by 2010, sparking a massive debate in Dubai's real estate sector. Investment bank EFG-Hermes also produced its own report recently, saying there would be a 20 per cent decline in property prices by 2011, adding fuel to the already intense issue.
Sultan Bin Butti Bin Mejrin, Director general of Dubai Land Department (DLD), also claimed that the property market here continues to be healthy with the Land Department registering 200 billion dirham in transactions so far.
Abid Junaid, executive director of ETA Star Properties, which has sold a large number of flats to Indians, said in some areas, such as Dubai Marina, speculation should stop as the development is already built.
''Negative global sentiment coupled with the slow sales period of summer and Ramadan has had an affect on UAE sentiment,leading to all this speculation,'' Junaid added.
Although economists at Standard Chartered had suggested the introduction of a 50 per cent capital gains tax to root out speculators, Bin Galita says speculation encourages others to buy.
However, he said The DLD also announced last week that a rental index would be announced after Eid ul Fitr, designed for newcomers to Dubai.
''When people start seeing the index, [landlords] will be reasonable with their prices. Otherwise people will leave,'' Bin Galita said.