Canary Wharf in 2008 v Dubai in 2026

There is currently a lot of noise about what is happening/or will happen in the off plan property market in Dubai.

Back in 2006, 2007 and 2008, I was running an estate agency that had a very active 'off plan' sales team in Canary Wharf. In 2008, we went from generating over £100k a month in fees from “flipping contracts” to struggling to turn over £10k. We had the same team, the same marketing, the same skills, the market had just turned in the worst way and the reality of it was a shock.

I see a lot of similarities between the market in Canary Wharf in 2007 and Dubai pre conflict and for what it's worth, I will detail that and some of  what I learned from that experience below. Hopefully someone will find it helpful.

1. Speculative markets rely on belief that someone will come along in short order and pay you sufficiently more than you think the asset is currently worth. 

In an off-plan, speculative market, value is not just about the underlying asset itself. It is driven by the expectation that someone else will come along shortly and pay more than you did.

You effectively get a chain that looks something like this:

• Investor A buys to flip

• Investor B buys expecting further growth

• Investor C either completes or flips again

This only works while everyone believes that there is going to be a large pool of “next buyers” 

The moment that belief weakens or disappears, liquidity also disappears very quickly.

It does not take a direct market shock to trigger this. Events like the credit crunch, war or geopolitical tension can shift sentiment on their own not just through first order effects.

They introduce:

• uncertainty/fear

• volatility

• a focus on capital preservation

• 
  

When that happens, investors stop buying contracts purely for resale and the then smaller pool of long term investors look for more value.

That is when the whole thing can start to feel like a house of cards, because many participants never intended to hold long term or lack the fortitude to do so now that the post completion picture is not so rosey. 

2. Property markets follow credit and the credit cycle 

Real estate is heavily dependent on credit. That was clear during the credit crunch.

The system relies on:

• buyers getting mortgages to complete

• developers accessing finance to build

• investors using leverage to enhance returns

• Buyers being able to sell existing assets or raise finance against them

• 
  

When credit tightened in 2008, everything slowed immediately:

• mortgage products disappeared

• Refinance and sale of existing assets become difficult or impossible

• investors could not complete

• Cash buyers ruled the day (and its surprising how few of those were brave enough to do so) 

Even willing buyers often simply could not get adequate funding. 

3. The second-order effects are the silent killer.

War, geopolitical or extreme financial events rarely damage property markets directly or in just one way. The bigger issue is what they do to the wider system and its effect on sentiment. 

You start to see knock-on effects across:

Financial markets

• increased volatility

• capital moving to safer assets

• tighter financial conditions

Banking and lending

• stricter lending criteria

• higher borrowing costs

• reduced willingness to refinance existing assets 

Investor behaviour

• losses or devaluations in other asset classes

• reduced liquidity

• lower appetite for risk and desire to preserve capital 

These are the things that quickly remove the “gas” from a speculative market 

4. The issues often hits in the investor’s native market

Dubai, like Canary Wharf was, is heavily reliant on international buyers.

Many of those buyers are funding purchases through:

• mortgages in their home country

• borrowing against other assets

• profits from businesses or portfolios elsewhere

If global conditions tighten, the impact shows up quickly:

• financing becomes harder to access

• asset values at home fall

• currency shifts increase effective costs

An investor who fully intended to complete can suddenly find:

• their mortgage is no longer available

• borrowing costs have increased sharply

• their own liquidity has reduced 

• They can no longer raise capital 

5. Completion is where things become real

This is the point most off-plan investors hope they will never reach.

The plan is usually to sell long before completion.

Many sellers will not be willing to accept their loss until the very last stage, the options narrow quickly at this point. 

If large numbers of investors reach this point at the same time, you get a wave of similar units hitting the market together. That is when prices start to come under pressure. 

7. Lack of differentiation becomes a real risk in luxury off plan towers 

In large modern developments, particularly towers, you often see the same floor plates repeated across multiple levels.

In markets like Canary Wharf in 2008, and Dubai today, it is commonplace to have:

• identical units on multiple different floors

• owned by different investors

• all trying to sell before completion

At that point, the market becomes highly competitive very quickly.

A one-bedroom on the 12th floor is not meaningfully different from a one-bedroom on the 18th floor. And it is often not that different from units in neighbouring developments either.

When buyers have multiple near-identical options, price becomes the main lever.

That is where things can turn.

If several investors decide to sell at the same time, you can get:

• undercutting between sellers and agents 

• downward pressure on pricing

• a race to secure a limited pool of real buyers able to facilitate completion

In a rising market this is masked by momentum. In a slowing market, the lack of differentiation becomes exposed very quickly.

Written by Jaimie Beers