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End Of Year 2008

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During the springtime we usually have rains in many areas of the country. Some can be gentle, but sometimes they can be torrential and come with damaging winds, tornadoes, and even a little hail. When the rain comes down like we want it to, it will be good and steady and not too overwhelming. It will be just enough to help the crops that have just been planted to get a good start. It will make our yards blossom with beautiful trees and flowers. We know that it takes regular rainfall to give us the lush green color we want to our lawns to have.



When Mother Nature gets carried away, our lovely spring and early summer picture can get a little ugly. When storms get a little too violent for our taste, high winds and tornadoes can destroy a lot of our early blooming plants and trees. This is relatively small damage compared to what can happen to homes and other property. Homes can have their windows broken out by flying debris or they might even get blown away all together.

When the gentle rains turn into torrential flooding, it can really cause some damage too. The crops that farmers plant in early spring can suddenly find themselves under a foot of water. Sometimes if the water recedes and dries up quickly enough they might be saved, but sometimes the farmers must start all over and re plant a lot of things. When water stands for many days or weeks on end like it did in the Midwest area this year, it can be catastrophic for them and us. Prices go up at the grocery store and it can even affect the cost of fuel.

By the time hurricane season comes around, some areas of the country might have already taken their worst hits because of wet and windy weather, but the coastal states will just be getting ready to get theirs. This year we have had several tropical storms and hurricanes and they have caused flooding. Some places were worse than others, but it has not been nearly as bad as some major hurricanes of the past. The hurricane season for this year is not over yet and it remains to be seen if the flood damage we suffer this year will end up being worse than in years already past.

Even with the records we have, it is always best to be prepared for the worst while hoping for the best.
End Of Year 2008
1.Demand & Supply

2.Cost of building

3.Buyer's income

4.Cost of financing

5.Competition

Real estate prices are hugely affected by the principles of demand & supply. If the supply surpass demand, the prices will start going down, in other case where demand is higher than supply, we will see an upsurge in prices. Cost of financing comes next, in majority of mature real estate markets; most buyers rely on mortgage and other means of home finance to purchase a home or property. Rate of interest on these loans can influence the property prices. Same is the case with building materials and labor cost. Average income of potential buyers and competition can also have an impact on prices.

Coming back to Dubai, the property prices have been on a rising streak ever since the Dubai Government allowed the foreigners freehold ownership in some areas. The demand was much higher than what the existing developers were able to supply at that time. More and more expatriates meant a constant rise in rents that also fueled the property prices and they kept going up. Dubai and other estates enjoy a very good per capita income (thanks to all those petrodollars), plus Dubai had no immediate competition from neighbor estates in the beginning (Abu Dhabi, Ajman, etc have only recently started to offer an alternate to Dubai real estate), these factors combined with the hype some of the mega developments (Palm islands, Burj ul Arab and Dubai mall to name the few) got, helped the market to maintain the price increase all along those years. Prices not only increased, they actually doubled or tripled.

Things have started to change a little bit now, as more and more developers have entered in the market and lots of projects are now in completion phase, supply is quickly catching up with the demand. Expatriates are forced to find a residence outside Dubai because of some abnormal rises in rents. Ajman and Abu Dhabi are now offering the investors some equally profitable opportunities. Keeping all these factors and changing scenarios in mind, we can safely conclude; that while it will take some time before we see a drop in Dubai property prices, the rate of growth is about to slow down in coming years.
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