For a key to the recovery of Dubai's real estate market, one need look no further than the Burj Khalifa, the world's tallest tower, which rises out of the desert floor of the city's gleaming downtown area.
Figures released by the Dubai government this week showed Indian citizens were the main buyers of luxury apartments and commercial space in the Burj Khalifa during the first half of 2012, spending $222 million. Iranians came second with $128 million.
For the Indian buyers, Dubai property is a refuge from currency depreciation that has taken the Indian rupee down about 20 percent against the US dollar since the third quarter of 2011. For the Iranians, Dubai provides a safe place to park money as international sanctions ravage the Iranian economy.
Four years after a property price bubble burst in Dubai, triggering a slide that cut home prices more than 60 percent from their peak, the market finally appears to have stabilized and is recovering in some areas. A major reason is an influx of foreign money using the emirate as a safe haven.
"A lot of people in the Middle East and Russia, Pakistan, the Asian sub-continent are looking for a safe haven," said Farouk Soussa, Middle East economist at Citigroup in Dubai.
"Perceptions are that the real estate market has bottomed out. If you are looking for more long-term investment, the market in Dubai seems reasonable."
Because of the importance of real estate in Dubai's economy — it contributed about 13 percent of gross domestic product last year, almost as much as manufacturing — a healthier property market is likely to have a string of positive effects. Among other things, it may reduce the pressure on indebted state-linked companies that are restructuring their loans.
The recovery is not being felt throughout the market; in less popular areas, especially less affluent districts in northern Dubai, prices have stayed weak, analysts say.
But positive signs have mounted in the first half of this year. Real estate agent Knight Frank's quarterly prime global cities index showed apartment prices in Dubai rallied over 5 percent in the second quarter compared with six months ago.
Average apartment rents in Dubai are estimated to have increased 2 percent in the second quarter, according to a report by property consultants CBRE. Particularly well-situated communities such as Emirates Living and Downtown Dubai may have seen rises of 5 to 8 percent quarter-on-quarter, it said.
The real estate recovery has supported a rebound in Dubai's stock market. Shares in its biggest property developer, Emaar Properties, hit a 15-month high last week and are up 32 percent this year — though much of the company's rising earnings are due to its successful diversification away from residential real estate into hotels and retail.
Kuwait inflation plunges to nine-year low
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