Real estate has always been the surest way to accumulate wealth – and is likely to remain so. Yet, the financial crisis of 2008 changed the game, and brought a healthy dose of reality back to the real estate sector. Today, as investors look at this asset class again with renewed optimism, we need to ask ourselves if we have truly learned the lessons of the past five years.
If you look back over historical data, real estate has provided investors with a stronger and steadier return than any other investment option. It has an uncanny ability to bounce back after a downturn and outperform other asset classes.
The 2008 crisis was a case of the pursuit of profit crowding out sensible investment decision making. True, a few speculators managed to come out unscathed, but most did not. Many lost vast sums of capital when property values plunged by half. Thankfully, it appears we have reached the bottom and are on the way back. But for those investors with memories still fresh from the crisis, is real estate once again an asset class worth considering?
The GCC region is characterized by its rising populations and increasing wealth both contributing to a flourishing economy. Major real estate developers in the UAE reached peak valuations in 2008 before crashing in the crisis due to difficult credit and economic conditions.
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