Both sales and mortgage valuations have taken big hits amid the slowdown in the real estate industry, according to Ronald Hinchey, resident partner, Cluttons Dubai.
He revealed that company sales were at two or less a month, compared to about 15 during the peak months of July and August last year.
Also mortgage valuations, which peaked at about 250 a month for around 17 mortgage providers were down to 50 per month.
'Property management has continued and commercial valuations have continued so those two departments have kept our business going,' he said.
Cluttons expects to see a drop in the price of residential rents, a move that will not be unpopular. 'I think residential rents will need to come off their highest peaks by at least 50%,' he said, adding that prices would also be affected by the number of people leaving the country, which would slow demand.
However, with some contracts running for one to two years, he said the full scale of price drops would not be felt until 2011.
Hinchey also stressed the importance of affordability in Dubai's real estate market. Currently young executives spend around 60% of their salary on rent whereas between 20 25% would be more realistic.
He is not bullish about recovery in the real estate market. 'Given the fact we're looking into a bit of a black hole at the moment, we really don't know where the world economy is going, we really don't know what's happening to liquidity, we really don't know what's happening to demand,' he said.
And he hit out at developers, agents and analysts who predict a recovery in 2009. 'A lot of projects have been shelved or cancelled. So for people to say everything is going to come right in the second, third or fourth quarter is just wishful thinking,' he said.
