Property speculators are back in Dubai, aiming to make their fortunes by buying apartments and villas for cash, then selling them within months, weeks or even days. It’s a sign, some people fear, that Dubai risks repeating the mistakes of the past.
Queues of investors have formed outside the offices of major real estate developers in the past several months, in scenes that recall the emirate’s boom days before 2008, when money poured into Dubai property from around the world. That boom was followed by a devastating crash when the bubble burst; inflated residential property prices plunged by more than 50 percent between 2008 and 2011.
Dubai was forced to obtain a $10 billion bailout from neighboring Abu Dhabi. This time around, there are reasons to think that any property bubble will not be as large as the last one; supply and demand have not diverged as much, and government officials have said they will regulate the mortgage industry. But given Dubai’s history, renewed signs of exuberance in the property market are grounds for concern.
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