Dubai Property

Authorities are taking proper steps to avoid new property bubble forming. Dubai, which suffered one of the world's worst property crashes in 2008, has doubled the property-sale fees in a bid to limit speculation and avert another housing bubble (link). It is expected that Dubai will introduce further regulations in coming months.

The profits are also back. Dubai-based developer Deyaar has recorded AED 87 million net profits, which translates to 162% growth compared to the 2012 period (link). Emaar Properties reported third-quarter profit increase by 50% (link).

Developers are announcing new projects; off-plan sales are back and so are the flippers. Projects put on hold have started and mortgages are now easily available. Mega projects were announced during Cityscape Dubai this October.

On the other hand, Abu Dhabi's Aldar Properties has shifted strategy to focus more on earning income from malls, hotels and other rental properties which it owns, along with building small phased developments (link).

Small-phased developments can be slowed or suspended in response to the market conditions and act as real option. It means that the development decision can be treated as exercising of an option, which can reduce the developer's exposure to another boom-and-bust cycle.

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