ECONOMIC CRISIS AND CAR INDUSTRY

Economic Crisis And UAE Real Estate



Economic crisis and UAE Real Estate

Introduction

The primary objective of this study is to investigate whether there is a relationship between real estate sector and strategic level of Dubai economy and at the microeconomic level of Dubai Real Estate Market. Empirical evidence has shown that such a relationship does exist in Dubai, at both the macro and microeconomic levels.

Real estate over supply may happen as a result of inappropriate government policies that distort private incentives. For example, uncontrolled Real Estate liberalization may lead to the emergence of new Real Estate institutions that compete with existing lending institutions by offering loans on generous terms. As competition intensifies, and more Real Estate resources become available for real estate, investment in real estate rises and eventually real estate prices will fall, after initial increase above their fundamental values.

Dynamic of UAE Real Estate Market

Determinants of real land parcel prices are alike to those of other assets. These are, among others, the expected service stream (i.e. consumption service) or foreseen future cash flow (i.e. rents) and the needed rate of come back as a discount factor. In the long run, real estate prices depend on demand factors, like national income and average discount rates, and on supply factors, like cost of construction, availability of land and the quality of the existing stock of real estate.

The supply of genuine land parcel is local in environment; it takes a while to deliver a new supply of real estate because designing and building takes long time; leases of genuine land parcel can be inflexible due to long-term lease contracts; real estate market charges are not transparent because of bilateral discussions of transactions; the genuine land parcel markets are illiquid due to high transaction charges; genuine land parcel market ...