Dubai working on rules to avert property bubble: official | Reuters

Dubai working on rules to avert property bubble: official | Reuters:

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Buildings are seen under construction, along with rush hour traffic as a Dubai Metro 

train arrives at a station in Dubai October 31, 2011.

Credit: Reuters/Jumana El Heloueh

Dubai's government is working on new rules to protect its real estate market and prevent any excessive rise of property prices that could end in a crash, a senior official said on Tuesday.

The bursting of a property bubble in 2009-2010 caused prices to plunge by more than 50 percent, pushing Dubai close to a debt default. The market is recovering strongly this year, with apartment prices up about 20 percent from a year earlier, and the International Monetary Fund has warned of the danger of another bubble.

"We didn't create the bubble, it was a global crisis. The real estate challenge is over now," Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai's Supreme Fiscal Committee and uncle of the emirate's ruler, told reporters.

But he added, "We are working on our regulations. Sometimes I don't see that (high property prices) are a good thing. We don't want Dubai to become an expensive city.""

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