Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Print
Email
Discuss this article (26 Comments)Dubai property recovery 'could be late 2011' - report
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 13 May 2009
PROPERTY PREDICTION: EFG Hermes says the recovery to Dubai's real estate market could be as late as the end of 2011. (Getty Images)
A recovery in the Dubai real estate market might not happen until late 2011 as a result of subdued investor sentiment, according to a new report by EFG Hermes.
Analysts at the Egypt-based investment bank, in a report published on Wednesday, said it had expected recent clarifications from the UAE government on home ownership to improve investor sentiment.
The new federal law passed earlier this month said foreigners buying a home in the UAE valued at more than 1 million dirhams would be eligible for a six-month renewable residency visa.
A statement issued by the Ministry of the Interior said the move underlined the government’s commitment to serving the interests of all people who view the country as "an oasis of stability and peace".
But EFG Hermes analysts called the rules "self-destructive rather than helpful". As a result, they have predicted that a market recovery in Dubai could happen as late as late-2011, rather than its earlier prediction of the second half of 2010.
Analysts also said property prices in Dubai were continuing to slide and were now down 35 percent since the start of 2009.
The latest study on the emirate's real estate market added that prices were 40 percent off their peaks of 2008 while transaction values and volumes were also subdued during April.
Latest figures revealed that the total value of transactions amounted to AED31.8 billion during the first quarter of 2009, compared to AED73.4 billion in the fourth quarter of 2008 and AED110 billion in Q3 - when the property market was at its peak.
This represents a 72 percent drop off in market activity from the highs of the previous year, EFG Hermes added.
And analysts forecast that the slump in Dubai house prices would continue until they fell up to 60 percent from their 2008 highs.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
MAKHTOUM Committee
Posted by Muhammed Azeem, Abu Dhabi, UAE on Sunday 17 May 2009 at 20:24 UAE time
If Dubai ruling family can take over the incomplete real estate properties, complete and rent out..the market will become stable.
MAKHTOM family may analyse this in line with the management practices of KHALIFA committe in Abu Dhabi.
Posted by Muhammed Azeem, Abu Dhabi, UAE on Sunday 17 May 2009 at 20:24 UAE time
If Dubai ruling family can take over the incomplete real estate properties, complete and rent out..the market will become stable.
MAKHTOM family may analyse this in line with the management practices of KHALIFA committe in Abu Dhabi.
its amazing......
Posted by ametis, Dubai, UAE on Sunday 17 May 2009 at 16:26 UAE time
I find it amazing reading postings from people who bought properties hoping to get rich quick from the action...
And when the market collapses they try to ttack the host country, yet their own countries will probably wont even allow you to buy a property because you are a non resident.
Not many eons ago greece passed a law that the national was entitled to buy back the land/property sold at the original price..
Hey everybody please list here countries that give you automatic right to enter the country, because you made a minor investment, yes guys in the real world buying a HOLIDAY home is a minor investment..
So lets get real, we are in a host country....
Sad to say, if you dont like it, head back home to pay Taxes.....
Posted by ametis, Dubai, UAE on Sunday 17 May 2009 at 16:26 UAE time
I find it amazing reading postings from people who bought properties hoping to get rich quick from the action...
And when the market collapses they try to ttack the host country, yet their own countries will probably wont even allow you to buy a property because you are a non resident.
Not many eons ago greece passed a law that the national was entitled to buy back the land/property sold at the original price..
Hey everybody please list here countries that give you automatic right to enter the country, because you made a minor investment, yes guys in the real world buying a HOLIDAY home is a minor investment..
So lets get real, we are in a host country....
Sad to say, if you dont like it, head back home to pay Taxes.....
EGF-Hermes and Dubai
Posted by Husain, Dubai, UAE on Sunday 17 May 2009 at 14:16 UAE time
I am an expat and an investor.
EGF-Hermes is an Egyptian Investment Bank. If they were that smart Cairo should have been Dubai. Before they bad-mouth Dubai they should twice, thrice. Their earlier predictions at boom time were equally off the mark. I personally think they take perverse pleasure in bad-mouthing Dubai.
HH Sheikh Mohammed wants Dubai to succeed and will do whatever is necessary. Its just that these days his hands are tied up a bit and has to go along UAE Federal rulings especially on Real Estate, for example. The 6 month Residency Law is a tester and is a Federal UAE dictate. I am sure the Authorities will realise that it is not feasible and will be corrected soon.
Dubai will take 6-12 months time to recover, maybe not to the level of Sept 2008, but recover it will. Insha'allah.
Posted by Husain, Dubai, UAE on Sunday 17 May 2009 at 14:16 UAE time
I am an expat and an investor.
EGF-Hermes is an Egyptian Investment Bank. If they were that smart Cairo should have been Dubai. Before they bad-mouth Dubai they should twice, thrice. Their earlier predictions at boom time were equally off the mark. I personally think they take perverse pleasure in bad-mouthing Dubai.
HH Sheikh Mohammed wants Dubai to succeed and will do whatever is necessary. Its just that these days his hands are tied up a bit and has to go along UAE Federal rulings especially on Real Estate, for example. The 6 month Residency Law is a tester and is a Federal UAE dictate. I am sure the Authorities will realise that it is not feasible and will be corrected soon.
Dubai will take 6-12 months time to recover, maybe not to the level of Sept 2008, but recover it will. Insha'allah.
Rules are supposed to be fixed
Posted by Mark Flap on Sunday 17 May 2009 at 07:56 UAE time
I don't know whether Abbas is making a sophisticated joke and I missed the point...but surely rules aren't supposed to change. If Dubai wants foreign investment, it can't promise residency to property owners one minute, then change its mind once people have bought houses. It destroys all trust in the rule of law. Contracts can't change halfway through to benefit the seller (or disadvantage the customer).
Sadly, it seems to be inherent in most Arab countries. Contracts can be torn up and rewritten at a moment's notice, with no legal recourse for the customer. In the case of Hydra Properties, some customers didn't even get a contract!
Posted by Mark Flap on Sunday 17 May 2009 at 07:56 UAE time
I don't know whether Abbas is making a sophisticated joke and I missed the point...but surely rules aren't supposed to change. If Dubai wants foreign investment, it can't promise residency to property owners one minute, then change its mind once people have bought houses. It destroys all trust in the rule of law. Contracts can't change halfway through to benefit the seller (or disadvantage the customer).
Sadly, it seems to be inherent in most Arab countries. Contracts can be torn up and rewritten at a moment's notice, with no legal recourse for the customer. In the case of Hydra Properties, some customers didn't even get a contract!
Click here to post a comment
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST REAL ESTATE
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST REAL ESTATE
LATEST MIDDLE EAST BUSINESS NEWS
- Sport: Lee Westwood wins Race to Dubai
- Construction & Industry: Qatar signs $22.79bn rail deal with Deutsche Bahn
- Media & Marketing: Dubai developers see negative press reports decline
- Transportation: Kuwait to allocate Iran port to boost trade
- Retail: Sunseeker ME announces regional expansion plans
SHARE PRICE CHECK
RELATED STORIES
Market Turmoil Focus
3 stories- EXCLUSIVE: Boeing chairman sees more job cuts in 2010
19 Nov '09 | News - More UAE bank mergers predicted in 2010 - Ethos
19 Nov '09 | News - Dubai property market 'may take 10 years to rebound'
18 Nov '09 | News
EFG-Hermes
| 119 stories- Gulf economy to grow 6.2% in 2010 - EFG Hermes
12 Nov '09 | News - Egypt PM sees turnaround, seeks 7% growth
27 Oct '09 | News - Saudi house prices set to rise over next two years
21 Oct '09 | News
Mobile
