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Dubai was a very attractive place for real estate investment before the economic crisis hit the world. The predictions for 2009 were that the property market in the emirate is going to slow down even further and experience a greater price drop due to low demand. The gravest of prognosis did not come true however, and the prices experienced a 6% percent lower drop in the second quarter of 2009. The construction sector has been really badly hit by the recession, so it is reasonable to overview its future performance in 2010 to determine the Dubai property market movements.

For now a number of residential and public construction development projects such as the Dubai Towers Jeddah have been put on hold for an undetermined amount of time. Others such as the Sama Dubai have been stopped at a planning stage and for most it remains unclear whether they are ever going to be continued and taken to the next level. There are no official announcements concerning other important projects such as the artificial Falcon Island. All these uncertainties can definitely be considered a cause for concern not only for sellers, but for investors in Dubai property as well.

On the other hand, projections are that the construction sector is not going to diminish its importance in the emirate and the level of operations is not going to drop dramatically despite the halt and abortion of a number of development projects. The supply in the Dubai property market is expected to increase with approximately 22,400 new residential units by the end of 2009. The trend is expected to remain within a short range from this estimated number in the beginning of the following year. With the market slowly recovering and stabilizing, large fluctuations that have been common in the recent years are projected to come to an end. The confidence of investors is also increasing with the recovery of the global economy.

Another major event that is expected to occur by the end of 2009 is the merger of some of the leading real estate businesses in Dubai. The two companies – Emaar Properties and the Dubai Holding have already completed the negotiations and some technical procedures are carried out at present for the deal to be realized in October of this year. This is definitely a move that will improve the positions of the Dubai property business in the international scene. With the more efficient management that is expected, more construction projects are estimated to be reopened and completed in 2010 as well as in the following years. As with any consolidation, however, fears of future artificial price inflation are also emerging among investors.

Overall, the construction sector in the emirate is going to remain stable during the next year. With the Dubai property market slowly recovering, the supply is still going to increase despite the diminishing growth rate. The prices are also expected to reach stable levels and may be even start to go up as the industry slowly expands again due to the consolidation.