The International Monetary Fund, IMF has urged the Dubai Government to take stronger measures to avoid yet another property bubble.
The IMF regional director Masood Ahmed told in Dubai that the authorities in Dubai have taken measures, which are effective.
However, there is a need to put in place stronger measures to dampen the speculative transactions in real estate. He warned of renewed market activity aimed at profits and said that such efforts would discourage a quick turnaround.
Citing the example of Singapore, he said that a substantial increase in sales tax can be one of the ways to prevent such activity.
The real estate bubble burst in Dubai in 2008-09, saw the prices in the property markets crashing amidst the recession.
Foreign investments drove the property sector for a high, before the global financial crisis pushed it into free fall, shedding half of its 2008 records.
But the market has recently made a strong comeback as investors flocked back at a time when the local economy withstood the regional turmoil.
The real estate sector has been recovering as Dubai’s trade, tourism and transport have continued to grow, banking on large investments in the past few years.