dubai property to be in doldrums for forseeable says fitch
News Posted On: 20 July 2010
Dubai property prices are unlikely to see any growth until at least 201/13, ratings agency Fitch has predicted. In one of the most downbeat reports we have seen on Dubai for several months the agency said that the best the market could hope for was a prolonged period of stagnation and the worst a second-dip correction. Fitch also said that Dubai property firms would find it difficult to refinance their loans when they mature in 2011/12.
Bashar Al Natoor, director of Fitch's EMEA Corporates team in Dubai said:
"Despite signs that conditions may be stabilising, as well as a recent round of debt restructurings and extensions, Fitch believes that the credit outlook for the sector remains negative."
In their statements Fitch contradicts the statements of many analysts made recently and of many indices.
For instance Colliers recently said that the market had most likely reached underlying value as prices are now back at 2007 levels. The Colliers Q1 index also showed the third consecutive quarter-on-quarter price growth at 4%, and the first annual price rise since the downturn struck.
Asteco's second quarter index was also marginally positive: Asteco said that prices were flat in the second quarter compared to the first. On the downside Asteco also recorded an 8% quarterly decline on apartment rents, and a 4% decline on villa rents. The continued decline in rents could easily lead to the second dip predicted by Fitch.
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