Jobs threat to dictate house price fall - top agent - Real Estate

Tuesday, 17 February 2009 6:58 AM

Job cuts will dictate how much house prices will fall over the next few months, a top Dubai real estate agent has said.

Speaking on the sidelines of the Dubai International Property Show, Vince Easton, sales director at property consultant Sherwoods said the city’s uncertain job market would have a "big impact" on prices in the next three months, predicting a new wave of layoffs in March.

“In March we could have another potential leaving situation so job cuts will dictate where we go on prices,” he said.

“We are a nation of expats who have come here to work, make money and live the dream. If jobs are under threat it makes that dream more difficult,” he added.

Widespread job cuts in Dubai in mainly construction and real estate have been triggered by the downturn in the market and the worldwide economic crisis.

A report by Swiss investment bank UBS last month forecast that Dubai’s population could shrink by 8 percent in 2009 due to companies axing staff.

Easton, who works in the company’s Dubai office, said although it was "accepted" that prices had fallen by 50 percent in many areas, the market would bottom out by the summer, with the cost of properties at places like Dubailand possibly falling further in between that period.

Rents, he said, had come off as much as 40 percent in Dubai in the last three months and Sherwoods were doing 25 percent more deals on the leasing side as a result.

Overall sales were down on the same period last year, he said, declining to say by how much.

Key to the recovery in the housing market depended on banks providing more liquidity for financing, which was unlikely to happen ‘until the market had bottomed out’, according to Easton.

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Posted by: Thameez Wednesday, 18 February 2009 11:02 AM[UAE] - UAE

No way!! Still the prices are same. In Murragabat 1 BHK ( renovated )70K, 2 BHK in BurDubai 115K. Only freehold props are getting cheaper. The food prices are same in Super Markets. If price increases in Super market they will stick a new price over it but now they say this is 'old stock'.

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Posted by: angelo Wednesday, 18 February 2009 7:29 AM[UAE] - UAE

Another "EXPERT" stating the obvious. When these EXPERTS who were encouraging people to mortgage their mothers gold teeth to invest in their "Madoff" schemes come up with tangible means of correcting the financial mess please tell us.

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Posted by: Aarti Tuesday, 17 February 2009 4:22 PM[UAE] - UAE

Rents have certainly fallen, just a quick look at dubizzle.com or gulfnews classifieds will show that. 1 Bedroom apartments that were going for minimum of AED 115,000 as little as 2 months ago, are now going for as less as 65,000 and an average of AED 75,000.

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Posted by: Beckers Tuesday, 17 February 2009 1:33 PM[UAE]

A recent survey listed Dubai as the 15h most expensive real estate in the world. A realistic appraisal of where Dubai 'should be positioned' will go a long way to determine how far real estate prices still have to fall.

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Posted by: Jack Tuesday, 17 February 2009 1:32 PM[UAE] - UAE

Obviously jobs and job security is key to Dubai's regeneration, Dubai has had it's 'moment' and going forward will now be on a different footing as it is now be a 'seasoned' player. It will also need to spread it's 'eggs and balance development and tourism with manufacturing, retail and other services, just like any other developing country. It will also need to decide on how it plans to continue with the use of expats in developing the nation. This 'crisis' is begining to reveal a level of anti-expat feeling that is growing throughout the GCC, whist it may be amonst the few, governments need to reassure all parties with strong clear policies. They will need to be more robust with regulations and create greater transparency to give investors the confidence to return. The UAE will continue to attract 'black' money though I suspect the fast buck brigade have moved on, but this is required to attract and give confidence to offshore financial institutions who have been burnt by the exposure the lack of clarity has caused.

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