Business leaders say property prices will keep falling over next 12 months.
Business leaders are predicting that prices on the Palm Jumeirah will plummet another 20 percent in the next year.
A special gathering of the Arabian Business Think Tank (ABTT) – comprising nine senior business figures – has forecast that average prices for an apartment on Nakheel's man-made island will fall to just AED1,022 per square foot by May 2011.
The ABTT estimated that current average prices in the area are AED1,200 per square foot – compared to a peak of AED3,000 per square foot in summer 2008.
ABTT members cited concerns of oversupply in the market, and continued unwillingness by banks to approve new mortgages.
The ABTT comprises Kanoo Group deputy chairman Mishal Kanoo; OMG Mena Region CEO Elie Khouri; Fairmont regional vice president Philip Barnes; Gulf Research Centre chief economist Eckart Woertz; Arabtec CFO Ziad Makhzoumi; Colliers International Regional CEO John Davis, Asda’a Burson-Marsteller Sunil John; Crescent Investments CEO Badr Jafr and ITP Executive managing director Karam Awad.
At a lunch last week hosted by ITP chairman Andrew Neil, the ABTT also set out predictions on the value of regional stock markets, gold prices and the strength of the euro.
Landmark Advisory said last month that increased supply of residential units in some of Dubai's most popular areas forced further rent declines in April.
The property company's April 2010 Dubai Lease Guide said the likes of Palm Jumeirah and Dubai Marina, which have performed better than other parts of the emirate during the past six months, have seen recent drops of up to six percent.
Landmark Advisory said average rents for a two-bed apartment on Palm Jumeirah had fallen from AED120,000 to AED115,000 a year, a drop of four percent.