Dubai needs safeguards against property bubble

Dubai needs safeguards against property bubble:

"Dubai’s economic recovery is gaining momentum, riding on the back of a dramatic upturn in the property market.

The real estate sector, which has rebounded from a 50% drop in home sales prices after the 2008 financial crisis, has seen average residential rentals grow by over 30% over the past 12 months, consultancy CBRE said last week. And bellwether Emaar Properties, the emirate’s largest developer and builder of the Burj Khalifa, has posted a 10% growth in second-quarter net profit. The buoyancy is reflected in a booming stock market, which has gained 37% in the first half, making it one of the best-performing exchanges in the world.

In the last few months, state-linked Dubai companies (GREs) have announced a slew of mega projects. Last month, Emaar said it would form a venture with Dubai Holding to build Dubai Creek Harbour, a 6.5mn sq m district including business, shopping, sporting and entertainment facilities. Emaar separately formed a venture with Meraas Holding to build a residential and commercial area near the city’s downtown area. The Meydan Group and the Sobha Group have announced plans to develop a leisure, retail and residential complex."

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