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Little chance of property recovery in Dubai this year

Property Wire
Little chance of property recovery in Dubai this year - Real Estate - Property - UAE - Dubai - UBS Bank


A recovery in the property market in Dubai is unlikely this year with some analysts predicting further steep falls in real estate prices.



The latest analysis from UBS Bank predicts that house prices in Dubai could plunge by up to 70% from their peak levels in 2008.

Analysts said that the real estate sector in Dubai will face a substantial glut next year while demand will continue to be weak as many of the expatriates who drove the property boom in recent years are losing their jobs and are returning home.

'In our view, we are still in relatively early stages of the property downcycle in UAE, and we believe risk-reward profits are not yet compelling for investors to consider market re-entry, hence, continued price declines are expected,' said UBS.

UBS expects the average house price in Dubai drop to about Dh500 per square foot this year, compared to its peak of Dh1,850 in the fourth quarter of 2008. Prices have already fallen by 25% cent to about Dh1,400 per square foot.

It also predicts a further decline in Dubai's expatriate population which will fall by 8% this year and 2% in 2010. 'We would not be surprised to find Dubai residential vacancy rates reach between 25% and 30% by the end of 2010,' it said in its report.


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