reuters poll predicts 5pc price falls in dubai 2012
News Posted On: 02 February 2012
Property prices in Dubai have near-constantly declined during the last few years, and this year looks like being no exception. According to a Reuters poll forecasting price drops of around 5% due to continuing oversupply and worries over the global economy. The Reuters poll included respondents from investment firms, research institutions and banks.
Even though economic growth in Dubai is expected to be 3.1% this year, which is slightly less than last year's growth of 3.9%, it is not expected to help the ailing housing market. Prices have now fallen by about 2 thirds since the 2008 peak.
Things began to go downhill rapidly in 2009 when Dubai was forced to restructure $25 billion worth of debt for the conglomerate Dubai World, after its property boom came to a sudden halt.
Abu Dhabi, which initially proved more resilient than Dubai is expected to see prices decline by up to 11% this year. At least four of the respondents thought property prices in Dubai would stabilise during 2012, although another three thought this wouldn't happen until at least next year. Other experts think prices may have already reached rock bottom.
It's estimated that the property market in Dubai may be still oversupplied by as much as 30%, while Abu Dhabi is suffering from an oversupply of around 20%. Even if prices stabilise, there are still thousands of residential and commercial units due to enter the market this year, and until this new supply can be absorbed experts feel recovery is unlikely.
View UAE property for sale
Written by Les Calvert
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