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Dubai house prices down 9% in Q2 - Colliers
The rate of decline in Dubai house prices slowed in the second quarter with values falling 9 percent, Colliers International said on Monday.
The real estate consultancy put the housing market’s better performance down to a 50 percent increase in transactions from April to June and a slight easing of mortgage availability.
However, it said financing still remained tight and cited expatriate job losses and lack of transparency from developers over project delays and cancellations for the 9 percent drop in the second quarter.
In the first quarter of 2009 property prices in the emirate dived 42 percent, according to Colliers.
Ian Albert, regional director at Colliers International, said: “After a significant decline in the first three months of the year, the market witnessed a deceleration in the rate of decline in residential prices in the second quarter.
"Thankfully, the magnitude of the decline that occurred in Q1 2009 was not, and is now very unlikely to be repeated.
“In the coming months the market will be searching for further evidence of market stabilisation as we draw nearer to the bottom of market prices. However, the results of the third quarter are traditionally distorted by the summer holidays and the holy month of Ramadan, and we would expect Q4 2009 to be a better indicator of future trends.”
House prices are now at second quarter 2007 levels and are down 48 percent on a year-on-year basis, Colliers said.
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Comments 1-8 of 8
Posted by Mart on 4 August 2009 at 16:58 UAE time
"I think all the pesimistic people out there have already missed the boat again as we have already hit the bottom in this market. Better luck next time around!!"
Missed the boat? You mean missing out on 50% falls, or paying a mortage on an apartment I can't rent out because there isn't enough tenants. Yes, I'm gutted.
The falls aren't over of course.
There is massive supply still to come online - look around.
That means new buildings aren't going to be started until the current massive surplus of inventory is cleared, and that is going to take years. So when the current buildings are finished the people building them will have to go home, to join the hundreds of thousands who've already left.
So massive new supply coming online whilst the population continues to dwindle.
In order for prices to rise you need to have a massive wave of immigration - hundreds of thousands of people. What are they going to do? Building? Building apartments when there are thousands of empty ones? I don't think so!
Remind us how that is going to lead to a bounce in prices?
Posted by Dod, Dubai on 4 August 2009 at 15:10 UAE time
Alex, you say there is no summer crash - I suggest you wait until the summer is over before making such a statement. I know that the penny has not quite dropped yet for some landlords, but that does not mean it won't
A recent article in this paper quoting an expert who said the market had not crashed in the summer then went on to say that the market had come to a standstill. If anyone could reconcile those 2 statements I would be interested in reading it
Posted by John Thomas, Dubai, UAE on 4 August 2009 at 07:50 UAE time
Alex, snap out of it, wake up smell the coffee, even AED400 per sqft. is too much for a "sand castle" that will never be yours... and you know what happens to sand castles, don't you?
If the government doesn't wake up and do something about this situation, the worst is still yet to come, so go back to your employer, surely a developer and let them know that the fundementals do NOT exist here in Dubai to be sustainable enough for the Real Estate market to rebound, even my 5 year old nephew could tell you that. Face reality, admit it and do your best to resolve the problem, denying it will surely not help... a little growing up and basic knowledge will help too. Good luck to you and your Developer...
Posted by Martin, Dubai on 3 August 2009 at 20:35 UAE time
You must have one heck of a crystal ball to think i am unemployed. I spend a lot of my time in Dubai because of business, not that its any of your business. Nor should it have any affect on my opionions expressed.
The market conditions i spoke about may well be true across the globe but in most 'real' economies, the price is set by supply and demand. Other factors include infrastructure, schools, city, other modes of transport available, local shops etc amonst other factors. The fact is, this market IS different. To answer your question - that's how i can base my opinion. I did not say the market would crash further in the summer but like with everything else, time will tell. There is sentiment that the market is more quiet because of the summer and holidays but i do not think there will be any sign of a recovery even when the winter comes.
I also do NOT make comments to 'each and every article' but only the ones of interest. Ofcourse, if you are seeing my name everywhere, i should be flattered :). Moreover, If you are checking each and every article that appears here, you my friend, clearly have more time than me :)
FYI, i have the money to purchase. I currently rent now, which to me is absolute dead money but neither do i have any confidence to buy in such a market that urgently needs regulating or in an economy that i cannot effectively plan in. The boat you speak of may not be worth catching again because the more you look at it, the more it resembles the Titanic. That's the benefit of hindsight.
So what now Alex? - would you like to check my bank balance?
Posted by Alex, Dubai, UAE on 3 August 2009 at 18:54 UAE time
How the heck can you guys have an opinion on this market when you claim in a different county thousands of miles away. For your information Jonathan, the market parameters that you are refering to stands true for all the housing markets in the world. The fact remains that despite all the predictions by the neysayers, the market did not crash further in the summer time and it is obviously to you guys dislike. It appears that Jonathan is an unemployed probably ex-expat that has nothing better to do but make comments for each and every article that appears in this site. I suggest you get a life. The market will never be to your liking guys as if it dropped to 400 DH/sq ft. you still have no money to buy any way. I think all the pesimistic people out there have already missed the boat again as we have already hit the bottom in this market. Better luck next time around!!
Posted by Saiyed, Florida, USA on 3 August 2009 at 14:15 UAE time
You are right, but my estimate is it will fall to AED 400/sq ft. Just wait till end of August 2009
Posted by Farhad on 3 August 2009 at 13:46 UAE time
A revision on Visa rules can be a solution for the falling market.
this will motivate other countries' investors to invest in Dubai market.
Posted by Jonathan, UK on 3 August 2009 at 12:52 UAE time
The only reason why prices have stabilised is because sellers either cannot afford to drop them any lower because of outstanding loans which could cause them to go into negative equity or they are standing firm thinking its just not worth it to go any lower. The fact is, they will go lower because there are not enough buyers. There is no confidence in the market. For speculators, its still too risky and the maintenance fees are still a joke. As for end user buyers, there is no security in Dubai as an expat. Prices will continue to fall until they reach AED500 sq/ft or thereabouts . That's just my opinion ofcourse.