Dubai Real Estate market in fears of another bubble

A global property consultant said Monday there are worrying signs that Dubai might be confronting yet another financial bubble after property prices soared over 22 per cent last year and rents by 17 percent.

 Dubai is currently home to the world's tallest tower -- the Burj Khalifa -- and numerous manmade islands in the shape of palm trees along with map of the world.

In several sectors, the town is still recovering from the 2009 financial bubble that resulted in property rates in Dubai reduced by more than half. The town's government finally wanted a 10 million bail-out from neighbors Abu Dhabi, and Dubai-held companies are still trying to repay 10s of billions of bucks in loans after the town's frenetic constructing boom arrived into a stop.

In its yearly report on Dubai real estate in the United Arab Emirates, Jones Lang LaSalle directed to a variety of concerns, including unsustainable increase in high risk purchasing and property prices. Costs climbed even more after it was announced in November that Dubai will host Expo 2020.

Concerns of another bubble have now been lurking for months. The International Financial Finance stated in a statement earlier this yr that Dubai's mega-projects, or even "implemented prudently," can worsen the risk of a bubble and make additional risks for government-connected businesses as well as the financial system.

John Lang LaSalle stated the increase in residential property costs last yr was "irrational." But unlike the 2009 financial catastrophe that rocked Dubai, the investing and advisory company claims the market is "smarter" now.

The company stated interest by local and international investors is strong, with over $44 million poured into Dubai real estate market in 2013. The International Monetary Fund claims economic growth in the United Arab Emirates is likely to remain powerful at 4.5 percent this season.