Economy Crisis Hits Dubai Real Estate Market

Dubai real estate property prices fall by 50% due to lower demand frm buyers.According to reports,the real estate market in Dubai is falling from 20% to 50%.It is predicted by experts that aparment prices will fall by an average of 20% .Individual decline between 10% to 50%.Some how it depends on development.Villa prices will remain stable with an average drop of 10%.United Arab Emirates capital Abu Dhabi suffered a fall of 20% prices since last summer.Qatar suffered a fall of 10%.It has now become a Buyer's market rather than a Seller's market.Buyers have more advantage in negotiating prices.THe property prices will continue to fall for 9 to nine months which resembles a situation in hong kong 11 years ago.The values fell ranging from 20% to 50%.Expert predicted that investors would come back if property becomes more affordable as the asking price now is unsustainable.From international News, projects worth $72.35 billion are in a dilemma causing great lose to pakistani investors.Although there is no official annoucement about projects development on hold from developers,reporters stated that over 50 building projects can be seen in standstill.Real Estate projects worth $3.275billion has confirmed to to be cancelled.If this crisis continues,job losses will increase in constrution field which will worsen the situation.Following day,news said that the real extent of the halt in developments in Dubai has been revealed by an international bank which estimates that projects worth £53 billion have now been put on hold.According to HSBC 59 projects have been severely affected by the global downturn and of these eight have been cancelled and the rest put on hold.In a report note the banks says that high end residential projects and commercial developments are those at most risk in the current economic conditions.Hopefully good news will come in coming months.

Real estate vs U.S economy crisis

Real estate contributes a total of 10% output to US economyt. If real estate declines, it affects the constuction field.More and more people will loose their construction jobs, thus potentially increasing unemployment.

Real estate sales and prince are related.If real estate sales declines,it eventually leads to a decline in real estate prices too.Value of Homeowners homes will drop at the same time,doesnt matter whether they are actively selling it or not.This then reduces the amount of home equity loans the homeowner can get. Thus, reduces consumer spending.

According to reports and statistics,over 70% of the U.S. economy is based on personal consumption.If consumer spending decreases,it will contribute to a downward spiral in the economy. This results in further unemployment, further reduction in income and consumer spending. If the Federal Reserve doesn't intervene (by reducing interest rates, then the country could fall into a recession. The only good news about lower home prices is that it lessens the chances of inflation.