Investors may finally have made it home

Comment Dubai's investors may have at last landed on the bouncy cushions at the bottom.

After hurtling relentlessly down the property helter-skelter since September 2008 when prices peaked, Dubai's investors may have at last landed on the bouncy cushions at the bottom. At least, that is what the Colliers quarterly report on property prices tells us. Unlike the house views of many other local brokers, which seem to rely on reading tea leaves and magic beans in their assessment, the Colliers data at least uses real mortgage information supplied by the banks selling home loans.

It suggests prices may now be stabilising after the severe corrections of last year. Yet it only gives one perspective on a market that now finds itself in what many will hope is the bottom of a trough. It may turn out to be the tip of a fulcrum. Which way it pivots now rests in the hands of the banks as they begin to reap what they sowed in the form of soured home loans. The way lenders deal with their customers who are now struggling to meet their repayments will largely determine whether or when we will see a recovery in prices.

The demise of the off-plan property model and the shelving of projects gave the market some clarity over likely future supply. But that was clouded last week by the first property foreclosures seen in Dubai. Should banks choose to dump large numbers of foreclosed properties to recoup some of their losses, prices will inevitably come under further pressure. And by refusing to lower their mortgage rates for their solvent customers, they also risk increasing the pool of bad home loans.

It's a difficult balancing act that will ultimately determine whether property investors will get the soft landing they are all hoping for. @Email:[e-mail]