Homes For Sale

Know for its opulence, larger-than-life tourist attractions and luxurious lifestyles, Dubai and its wealthy residents were seemingly immune to the financial turbulence that rippled across the globe in recent years.

Not the case.

ArabianBusiness.com reports today that the first-ever foreclosed home in Dubai, a modest villa in The Springs, was sold by Barclays bank for $332,145, opening the door for similar sales in the future.

In fact, the oil-rich Persian Gulf country has about $16 billion in repossessed real estate inventory waiting for liquidation. It just adopted foreclosure laws as recently as 2008.

While the landmark sale is good news for lenders, which will now be able to recoup their losses, as well as buyers/investors, who have the opportunity to potentially invest in a popular foreign market at reduced prices, there is cause for caution.

Tom Bunker, investment sales consultant at real estate agency Better Homes, explains his concerns:

If the latter scenario plays out, it would likely push home prices down further, potentially causing more foreclosures and bank repossessions.

Sounds familiar.

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