As real estate regains most-favoured-asset status, safeguards are being put in place in markets such as the UAE, UK and India to prevent a new property bubble, let the buyer beware. In hindsight, experts are always likely to throw the maxim, “If it looked too good to be true, it probably was”. So is a bubble forming in high-demand markets such as the UAE, the UK and India?
“It’s possible, but in cities where prices have actually skyrocketed beyond affordability,” says Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India — global real estate firm. “It can be argued that they have done so almost everywhere in the country, but the fact is that people are still buying homes in most tier II and tier III cities. Nor is the supply in most of those cities either overly constrained or curtailed. So, when we talk of the possibility of a bubble we’re actually only talking of property in Mumbai and Delhi right now. And at this stage, it is still only a possibility.”
Giles Hannah, Managing Director of London’s VanHan, says that London is the safest there may be. “London property prices are nearly 20 per cent higher today than they were at the 2007 pre-crash peak. London property is a mid- to long-term investment, and even if the bubble was to burst, London historically always recovers. London has a stable economy and is seen as a global city and is centrally located in Europe, the Middle East and Africa for trade. The Gulf has the world’s best airlines and with the excellent air transport links from the region to London, we can see interest in London property investment increasing for the next few years.”