Prices fall up to 50% in prestigious Dubai development
Property prices in one of Dubai's prestigious developments have fallen by as much as 50% according to real estate brokers.
Prices in Downtown Burj Dubai, Emaar Properties' flagship development, have fallen at least 22%, while prices in the Burj Dubai tower itself have tumbled as much as 50%.
Brokers said Downtown Burj Dubai had seen some of the biggest price drops in Dubai because prices had previously risen so quickly.
'Downtown Burj Dubai had quite a sharp spike in pricing. Anything that has a sharp spike is open to a correction if the market slows,' said Vincent Easton, head of sales at Sherwood property consultants in Dubai.
The UK based company said that prices, excluding the tower, had fallen from an average of 3,500 dirhams per square foot to 2,700 dirhams in Downtown Burj Dubai.
Easton said the 'sharp correction' in prices had been caused by short-term speculators fleeing the market, but that the medium to long-term outlook was still very healthy.
'If you're looking to invest in property over the next five to 10 years you cannot go wrong. We are telling our clients that if you can, hold onto your properties,' he said.
But there is concern about the plunging prices as property investors who are in need of cash are selling at much lower prices.
'Burj Dubai was supposed to be the highest and hottest selling area. Now things have changed. The owners are in distress. They are desperate to sell a zero premiums or even minus premiums,' said Juned Ali, a senior property consultant at Alamfa Real Estate.
He added that many short term investors were selling as the fear they will not be able to meet looming payment deadlines.
Downtown Burj Dubai, a mixed use urban development that includes the recently opened Dubai Mall, has some of the most expensive properties in the Emirate. When the iconic tower is finished next year it is expected to be one of the most sought after areas.