No property market recovery in Dubai in 2009, experts predict
As participants in this year’s much subdued Cityscape Dubai property conference try to put on a brave face the latest news from analysts indicate that real estate prices are not set to improve this year.
Residential property prices in Dubai are likely to fall another 10% in 2009 as financial woes linger, according to a poll conducted by Reuters at Cityscape.
The view is that unlike more mature markets in the UK and the US, the United Arab Emirates real estate sector is not yet showing signs of recovery.
Residential property prices in the former boomtown have yet to reach a bottom and have a 20% chance of picking up before 2011, according to the opinions of nine analysts at banks, investment firms and research institutions polled by Reuters.
Two out of nine respondents said they expected Dubai property prices to hit a bottom in the fourth quarter of 2009, four predicted the first half of 2010 and two in the second half.
One expected prices to reach a bottom in 2011 or later. Prices in Dubai are expected to have fallen by 50% by the end of 2009 and by 60% by 2010.
‘The real estate market remains subdued as oversupply concerns and lackluster demand continues to characterize the marketplace,’ said Matthew Green, head of research and consultancy at property services firm CB Richard Ellis in Dubai.
‘Our view is that the market will bottom out substantially in the fourth quarter of 2009, but there will be some tail off into the New Year,’ said Chet Riley, an analyst at Nomura Investment Bank.
The Reuters poll also found that residential rents in Dubai are seen falling by 45% by the end of 2009 and a further 10% in 2010.
Three out of seven respondents expected rents to fall as much as 50 percent in 2009 and one by 30 percent in 2010.
The first ever Arabian Business Think Tank, a group of nine experts that will vote each month on major business issues in the region, said the panel voted 7-2 against any rise in residential property prices in the fourth quarter of 2009.
It predicted that the UAE’s property market will continue its downward spiral into the rest of the year.