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Discuss this article (12 Comments)Dubai house prices 'bottomed out in April' - study
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 02 November 2009
PRICE VIEW: A new report has claimed that house prices in Dubai bottomed out in April and have risen nine percent since. (Getty Images)
Dubai real estate prices bottomed out in April and have risen 9 percent since, HC Securities & Investment said on Monday.
Consensus estimates for the amount of real estate that will enter the market in the next two years are overstated, and the peak-to-trough decline was smaller than many analysts were expecting, the brokerage said in a research note.
HC Securities believes around 60,000 units will hit the market by the end of 2011, compared to other analyst estimates that range between 90,000 and 140,000.
“Our Transaction Price Index suggests that the Dubai property market bottomed out in April 2009 and has since rebounded by 9 percent, following a 30 percent peak to trough drop,” a team of analysts wrote.
The factors behind the rebound include improving sentiment and risk appetite; a negative real interest environment; and attractive rental yields, the firm said.
Mortgage values and volumes have recovered to pre-crisis levels, reaching 24 percent and 14 percent of total transaction values, respectively, in October this year, compared to 7 percent and 6 percent in April, it said.
More recently, UAE mortgage lenders have raised their loan to value (LTV) ratios, relaxed lending criteria and lowered interest rates in line with the declining interbank lending rate.
The Dubai-based brokerage said that asking rentals in the emirate have been declining for nine months, dropping 38 percent, but that the pace of decline was slowing.
READERS' COMMENTS
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In Denial Again
Posted by Sammy, Dubai on Tuesday 3 November 2009 at 18:10 UAE time
Only a 30% Peak to trough drop?! This certainly must be a report on a city located on a different continent. If you mark-to-market all but a handful of properties in DD, you'll see a min 60% drop across the board. No matter how many vested-interest rosey reports that churn, prices will surely and inevitably settle/reach their equilibrium back to near 2005 levels, before the frenzied 300%+ prices hikes. What went up in such a manner, will go down in the same manner..its almost pure physics.. enjoy the belly flop
Posted by Sammy, Dubai on Tuesday 3 November 2009 at 18:10 UAE time
Only a 30% Peak to trough drop?! This certainly must be a report on a city located on a different continent. If you mark-to-market all but a handful of properties in DD, you'll see a min 60% drop across the board. No matter how many vested-interest rosey reports that churn, prices will surely and inevitably settle/reach their equilibrium back to near 2005 levels, before the frenzied 300%+ prices hikes. What went up in such a manner, will go down in the same manner..its almost pure physics.. enjoy the belly flop
interest rates
Posted by Petrometro, London, UK on Tuesday 3 November 2009 at 12:03 UAE time
8.6% ? If only I should be so lucky! I have a Buy To Let mortgage in UKL running at 9.9%. It's a disgrace Barclays and you Barclays know that you are blatantly profiteering, given interbank rates are so low. In addition why do you, Barclays charge me an administration fee to receive cleared funds to my GBP account? Never happened to me in a lifetime of banking before.
I agree with the bottom out statement, but only in the prime areas of downtown BD and the Jumeirah Palm and the Marina. Perhaps the metro may have something to do with this.
Posted by Petrometro, London, UK on Tuesday 3 November 2009 at 12:03 UAE time
8.6% ? If only I should be so lucky! I have a Buy To Let mortgage in UKL running at 9.9%. It's a disgrace Barclays and you Barclays know that you are blatantly profiteering, given interbank rates are so low. In addition why do you, Barclays charge me an administration fee to receive cleared funds to my GBP account? Never happened to me in a lifetime of banking before.
I agree with the bottom out statement, but only in the prime areas of downtown BD and the Jumeirah Palm and the Marina. Perhaps the metro may have something to do with this.
Dubai House Prices Bottomed out in April
Posted by M. Mouse, Georgetown, Cayman Islands on Tuesday 3 November 2009 at 11:47 UAE time
I certainly don't see see any reduction in mortgage interest rates, as usual there is nothing of substance to back up all the brash statements made by this outfit
Posted by M. Mouse, Georgetown, Cayman Islands on Tuesday 3 November 2009 at 11:47 UAE time
I certainly don't see see any reduction in mortgage interest rates, as usual there is nothing of substance to back up all the brash statements made by this outfit
sceptical also !
Posted by Graham, Dubai, UAE on Tuesday 3 November 2009 at 08:33 UAE time
This article says that mortgage lenders are making it easier by increasing Loan To Value and decreasing rates. This is not what i have seen in dubai, several mortgage lenders departed the market, plus Tamweel and Amlak seem to be in limbo waiting for the Government to sort them out and i am paying 8.6% for a dirham based mortgage when the dirham is pegged to the dollar and dollar interest rates are close to zero.... so the local mortgage lenders are under funded and nobody externally wants to lend them money so they borrow locally at about 6%.... this unfortunately is reality and if nobody externally wants to fund it you do have to ask why ? and where is all the local funding ? invested in a sovereign wealth fund in London, New York and Tokyo ?
Posted by Graham, Dubai, UAE on Tuesday 3 November 2009 at 08:33 UAE time
This article says that mortgage lenders are making it easier by increasing Loan To Value and decreasing rates. This is not what i have seen in dubai, several mortgage lenders departed the market, plus Tamweel and Amlak seem to be in limbo waiting for the Government to sort them out and i am paying 8.6% for a dirham based mortgage when the dirham is pegged to the dollar and dollar interest rates are close to zero.... so the local mortgage lenders are under funded and nobody externally wants to lend them money so they borrow locally at about 6%.... this unfortunately is reality and if nobody externally wants to fund it you do have to ask why ? and where is all the local funding ? invested in a sovereign wealth fund in London, New York and Tokyo ?
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