Dubai's Property Market Rebounds Strongly in 2012

The year 2012 has marked a significant turning point for Dubai's property market since the crash in 2008. Property prices are experiencing a rapid and impressive increase. Emaar's Arabian Ranches villas, in particular, have witnessed a substantial price surge of 24%. Other prominent areas such as International City, Greens, Springs, and Marina have also seen a rise in property values.

Emaar Properties, a key player in the market, has reported a 1.9% increase in its share price, reaching a 15-month high. Adding to the positive news, Emaar announced an estimated second-quarter profit of 614 million Dirhams ($167 million), representing a remarkable 82% surge in net profits. This outstanding performance is highly beneficial for investors.

Mohamed Alabbar, chairman of Emaar Properties, emphasized that Dubai's property market is making a turnaround after the crash in 2009, which was largely due to the global financial crisis and the subsequent drying up of available finance for the overheated sector. Alabbar stated that the real estate market in Dubai is now turning around, driven by the robust performance of key growth sectors such as aviation, retail, hospitality, tourism, and foreign trade.

Nakheel, another prominent developer, reported a net profit of 767 million Dirhams ($208.82 million) in the first six months of the year, a substantial increase from 562 million Dirhams in the same period the previous year. Revenues also experienced noteworthy growth, reaching 3.1 billion Dirhams in the first half, marking a significant 112% increase compared to the previous year.

According to Reuters, Union Properties also achieved an impressive turnaround, posting a quarterly profit of 83.6 million UAE Dirhams ($22.76 million). This notable result comes in stark contrast to the loss of 520.79 million dirhams reported last year. As a testament to this positive development, the company's shares increased by 3.16% on the Dubai Index.

There are several evident reasons behind the profitability of these property giants in 2012. Firstly, undervalued assets have played a crucial role. The cost of doing business has decreased over the past four years, and companies have already absorbed the impact of bad debts, resulting in fewer write-offs. Additionally, growth has been fueled by the flourishing sectors of aviation, retail, hospitality, and tourism.

Despite Ramadan, historically a relatively quiet period, there has been a noticeable increase in property inquiries from both end-users and investors. The Dubai Land Department has also reported a 21% surge in property transactions, indicating sustained market activity.

As the majority of UAE residents return from their holidays in September, an increase in market activity is expected, further reinforcing the positive trajectory of Dubai's property market in 2012