'It will be different this time'
There's no doubt that real estate plays a central role in developing the UAE's economy. The question is whether market players have learnt their lesson from last time or are we just heading down the same route?
According to Nick Maclean, managing director, CBRE Middle East, "Lessons have been learnt from the crisis. I believe it's going to be different this time."
Speaking to The National, he says, "We're in a very interesting position. Last year, demand and prices soared, especially in residential, between 25 and 30% ahead. This year, it's been much less buoyant. The trajectory of the increase is down and the number of transactions is down. I see it as a pause for thought in reaction to the prices of last year."
Government actions - including the new mortgage regulations and the introduction of the stamp duty on transactions - act as a brake on overheating the market. However, owners and consumers have also got more savvy in their approach to property purchase and rentals.
Some industry sources hope that the current transactional lull will not endure for long. "Notwithstanding the decline, there are sufficient signs to indicate the market reaching its peak - market prices have remained robust," said Simon Townsend, business development manager at real estate consultancy DTZ. "There does not seem to be a marked decline in investor interest as enquiries remain strong."
He agrees that investor caution remains and with good due diligence, there is always an increase in transaction times. "It is potentially too soon to judge the meaning of the current reduction in transactions; a true position of the market and its strength (or otherwise) will be clearer towards the final quarter of the year."
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Opinions differ on what this "calming down" period in Dubai's realty market means but for most industry experts, it's apparent that the market has learnt its lessons and more efforts are being directed towards curbing another bubble.