Dubai house prices plunge into uncharted territory
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Mortgages are scarce in Dubai, with interest rates between 8.5 and 9.0%
DUBAI — Just one year ago, property prices in Dubai were surging to record peaks undeterred by a real estate slump in major markets, but they have since gone into free fall and have yet to find the bottom.
Market watchers in the former Gulf boomtown differ slightly on the magnitude of the decline so far, but all seem to agree that the prices of Dubai property, which was selling unchecked over the past three years, should drop further.
"The decline in prices still has a little bit to go before bottoming out," said Sana Kapadia, vice president of equity research at the regional investment bank EFG-Hermes.
"We expect a total drop in Dubai of between 50 to 60 percent from peak prices in 2008. We have seen a cumulative decline of 45 to 50 percent so far in Dubai," she told AFP.
Consultancy firm Colliers International echoed similar estimates in its quarterly report this month stating that the prices of Dubai housing units had dropped by half by the end of June, compared to peak prices last summer.
A report by Landmark Properties last week put the drop in villa and apartment prices in the same period at 44 and 36 percent respectively.
