Dubai property prices slump 23% in Q4 2008

zoom

DUBAI: Winds of change blow through property market. (GETTY IMAGES)

Dubai property prices slumped by 23 percent during the last quarter of 2008, with villas showing a more marked decline than apartments, HSBC said in a report on Wednesday.

The emirate's once-booming real estate market has slowed as a result of the global financial crisis, as prices fall, developers scale back projects and jobs go.

Average prices for villas in the emirate fell 30 percent from September, but were up 33 percent year-on-year, while prices for apartments declined 20 percent from September last year, but were up 16 percent on the year.

"The December 2008 data also points to a 23 percent decline from the September 2008 peak," it said.

Dubai property prices rose 19 percent year-on-year.

"Transaction data also suggests some signs of distressed selling in Q4 2008. Our analysis of December data indicates there were a small number of units sold at prices that fell short of estimated construction costs," the report said.

Transaction volumes were down from the November 2008, but were healthy, it said.
In the first two weeks of January this year there were 1,782 transactions, up 6 percent from December 2008 and a 175 percent rise year-on-year.

"Typically, there is a one-month lag between sale and registration, which means that January 2009 data reflects December 2008 transactions. The pick-up in volumes is despite the number of holidays ... during the month. We think this implies a recovery of liquidity within the market."

Advertised rentals continued to rise, increasing 9 percent month-on-month, but the bank expects rents to ease as more units are converted from sale to lease.

Dubai property prices could fall as much as 60 percent in 2009 from their peaks last year, Shuaa Capital said on Sunday.

Rental rates for apartments and villas have been levelling off throughout 2008 with an average growth rate of 4 percent and 8 percent respectively, property services firm Asteco said in a recent report. (Reuters)

Print | Email | Discuss this article

| Share |

MORE FROM ARABIANBUSINESS.COM