Do not fear a fall in property prices

Real estate in Dubai has increased in value for years, and the market has not yet experienced a fall. There is a whole industry which has grown up around real estate, with thousands of people employed in building, supplying, selling, fitting out and maintaining all the new private and commercial property on the market.

The industry is desperate to talk itself up, but it should not be frightened of a fall. Every market in the world has times when prices go down, as well as times when they go up. What is important is to recognise that a fall in property values is not remotely the same as a crash, and there is far too much talk that equates a possible fall with a loss of confidence leading to a crash.

This is wrong, and is in part due to the newness of the market in the UAE. But even a small fall in the Dubai market like a 10 per cent drop in average prices would almost certainly only harm a few over-borrowed speculators, and not harm the market as a whole. The industry should be confident enough to recognise that it has a solid base and is set for a long future, which will include downs as well as ups.