Dubai real estate industry slumps

None had ever thought during its formative years that Dubai, the port city in the United Arab Emirates on the Persian Gulf and also known for its exalted real estate projects, would face diminishing prices in the same real estate industry one day. You may not believe but this is a crude reality. The city is facing this unusual scenario, thanks to the global downturn, for the very first time. Though it did face falloffs at several times in the past, they were certainly not in this manner. There has also been the abrupt end of a skyscraper set to rise two-thirds of a mile above Dubai. What is the main reason of this unexpected decision? It is nothing but the same financial crisis that is dominating the global market like an epidemic.

Well, the developer who has stopped the project is Nakheel. It is one of the prominent real estate developers in Dubai and the creator of several land reclamation projects that include Palm Islands, the Dubai Waterfront, The World and The Universe Islands. Nakheel is also responsible for the creation of several residential projects that include The Gardens, International City, Jumeirah Islands and Jumeirah Lake Towers.

What are the most formidable reasons that have made Nakheel abandon the project? Well, it came only after a foremost credit rating firm warned that falling real estate prices leave the outlook for the country's banking sector looking negative. It should be noted, apart from this, that the real estate values in the sphere of UAE, crumbled 8 percent in the last three months from the previous quarter. This, as indicated by the observers, happens to be the first and greatest decline in all these years. Nevertheless the state-owned company is smart enough to state, "This is part of our readjustment of our immediate business plans to better reflect the current market trends and match supply with demand."

What can be the following situation? Nothing can be said categorically at this moment but it seems that the crisis isn’t going to be over soon.