According to the results of a recent Reuters poll, Dubai property prices are expected to drop an additional 10 percent in 2010. The emirate’s debt crisis is projected to delay recovery in the property sector until 2012.
The majority opinion of 12 analysts from banks, investment firms and research institutions was that the prices of residential properties in Dubai have only a 13 percent chance of rebounding before 2011.
Some respondents said prices had already bottomed out, while others said they expected a minimum to be reached in the first half of 2010. Still others expected a minimum in the second half of 2010 and a few expected in the first half of 2011. It is no secret that the recent problems at Dubai World have further undermined the prospects for a recovery in the real estate sector.
In addition to this, conditions in the UAE property market are expected to remain weak in 2010 due to unfavorable demographics, oversupply of real estate and risks associated with canceled or delayed projects. What is also anticipated is the continued rise in vacancy rates in the wake of Dubai’s oversupply of housing. However, the quality and location of the asset will determine the effect in individual circumstances. Dubai is expected to have more than 30,000 new homes by the end of 2010, according to some estimates.
Since 2008-2009, hotel apartments in Dubai has been affected not only by the global financial crisis but also by the Dubai World debt payment saga. At the height of the financial crisis, projects worth billions of dollars were suspended or canceled. Thousands of expatriate and migrant workers lost their jobs and were forced to leave the emirate. According to some estimates, more than 500 projects have been suspended or canceled in the United Arab Emirates, with Dubai being the most severely affected.
In the long term, the financial crisis and the credit crisis will cause a decrease in liquidity and financing that will limit the supply of properties in the market. In fact, property prices are expected to drop another 10 to 15 percent before there is a major recovery in prices.
In general, rents in Dubai are anticipated to fall between 10 and 15 percent in 2010 and remain stable in the first half of 2011, with rents and prices possibly on the rise in the second half of 2011. Currently, The demand for apartments and apartments in Dubai for rent is considerably lower compared to Dubai Marina Apartments. You can contact Just Rental Dubai to get some of the best rental rates.
Meanwhile, housing prices in Abu Dhabi remained unchanged this year, with most analysts expecting prices and rents to rise further. Prices are expected to rise due to the current mismatch in demand and supply, but will stabilize as delivery of some of the projects is completed.