In late November 2009, world financial markets received news that Dubai World Inc. asked for a 6-month reprieve on debt payments to investors. News of trouble at Dubai World eroded some liquidity in the market. The media response was sensational, projecting another major collapse in Dubai real estate market sales. This type of response typically endangers prospects for investment in Dubai's recovering real estate industry.
Last week's announcement that Dubai World was injecting a 9.5 billion dollars to pay down its debts shows that Dubai remains the most ambitious capitalist region of the Middle East. This has lifted the mood in both local and international markets, providing some much needed good will for this city state, which has taken many steps to modernize, add infrastructure, attract foreign investment, create tax-free zones, and accommodate the needs of its expatriates and nationals.
With a larger portion of the new funds dedicated to Nakheel, a major force behind Dubai's real estate development, this should be an inducer of some activity in the market. Beeyoot.Com predicts Dubai would continue a slow real estate recovery despite the continued decrease in commercial rents and oversupplies of properties in some areas.
There are plenty of good options still out there. Dubai has many impressive construction projects underway and many residential and commercial developments already completed, including the Dubai International Financial Center, Burj Khalifa - the world's tallest skyscraper, and the world's largest shopping mall. Dubai is also now home to Meydan Racecourse, the recent venue of the Dubai World Cup annual horse race. In September 2009, Dubai also opened the Red Line, the first installment of its Metro system, with the second installment scheduled to open by the middle of next year.
"http://www.Beeyoot.com" Beeyoot.com's CEO Hashim Ahmed says "If you are looking for a warm climate and a huge potential for commercial growth in the next decade, then don't be discouraged by the present troubles in this market". Many analysts have also predicted that there will be another dip in market values before a total recovery in 2011, but real estate investors should recognize that a weak market is a good time to buy.
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