Realty Analysts See Big Discounts for Investors in the UK and US
By Suzanne Fenton, Staff Reporter

Published: April 02, 2009, 22:46

Dubai: Gulf investors can save as much as 30 per cent on top London properties, compared with just about a year ago, industry experts say.

Many Dubai-based companies are now opening offices in the UK in order to deal with the increased interest from the Gulf, and specifically the UAE.

Landmark Properties has just opened an office in the UK for this reason.

"The London office has been set up as our clients in the UAE and neighbouring countries have shown a great interest in investing in the UK. Investment opportunities are available now as property prices are dropping and the UK market continues to be both solid and mature," John Michael, manager of Landmark Properties in the UK, said.

With the British pound losing a lot of its value against the dirham, UK properties valued at £500,000 six months ago, would have cost Dh3.6 million. Now, this same property costs Dh2.66 million, according to Landmark.

Many investors in the Gulf and the UAE would view the UK and US markets as mature and solid in the long run.

So, is there really increased interest from Gulf investors in the UK?

"Yes and not just in the UK but also in the US and all over the place because the whole world is in a distressed situation," Thomas Bunker, investment sales consultant at Better Homes, said. Investors wishing to buy in the UK could find savings of 20 to 30 per cent, he said.

Back home in Dubai, property prices have already dropped up to 50 per cent in some areas and are set to tumble further this year. EFG-Hermes said in a real estate report on Sunday that prices would fall another 20 per cent in 2009.

Others think the sale sector will see further falls. "I'd go out on a limb and say they'll [prices] fall a further 30 per cent across the board.

"But every property is different and there is a wide variety of prices. In the end, the market is going to set the price and so some will lose for sure," Bunker said.

However, according to EFG, prices are set to stabilise during the first half of 2010 and may start to rise in the second half of next year. A huge boost in sentiment could be triggered by 2010 through a wider variety of home financing options and greater economic options, the note said.

The EFG-Hermes report also said that rents in Dubai could fall in the range of 20 to 50 per cent depending on location and the scale of increase in local supply.