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No Dubai house price recovery seen until H2 2010
Dubai house prices are unlikely to recovery strongly before the second half of 2010, a new report on Wednesday said.
Demand is focused in the rental market and buyer confidence remains weak in Dubai where values have fallen 50 percent since their peak last autumn, Egyptian investment bank EFG Hermes said in its 2009 review of the UAE real estate and construction sectors.
Completed properties or homes that are considered to be in a prime location currently make up the bulk of transactional activity, the report added.
Fallout from the global credit crisis has rocked confidence in the emirate and killed off investor demand. Prices have plummeted, particularly those for off-plan property.
Abu Dhabi property is "fundamentally strong", EFG said, although the market could come under pressure from falling rents in Dubai, causing a supply-demand driven correction, as residents and businesses opt for cheaper accommodation in Dubai.
The report predicted that some long term projects belonging to Aldar and Sorouh, the number one and two developers in Abu Dhabi, could be "scaled back in line with changing market dynamics".
Aldar, developer of the F1 circuit on the Yas Marina island in Abu Dhabi, could find debt repayment difficult in the short to medium term, the bank warned.
Arabtec, the UAE’s largest construction company, was EFG’s top pick with the stock up 35 percent in the year to date.
Sorouh is likely to need further funding for projects due for delivery beyond 2011, the bank added in the report.
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Comments 1-5 of 5
Posted by iqbal, sharjah, uae on 18 September 2009 at 17:07 UAE time
There is no recovery till 2015 accept it or not.
Posted by Jebel Ali Baba, Dubai, UAE on 18 September 2009 at 00:43 UAE time
What do you mean with recovery? The house and apartement prices in Dubai finally show some real values. They have been immoderate for the last five years. Now they are close to reality. Another 30% down and we are somewhere where it should be. Welcome back in the real world.
Posted by Paul King, Dubai, UAE on 17 September 2009 at 22:38 UAE time
There is no recovery! After such a dramatic fall, the world is experiencing a normal bounce. The stimulus packages around the globe have done what they are supposed to do... Band-aid their economies... Get ready for the next crash!
Posted by Mark Brown on 17 September 2009 at 18:17 UAE time
Aren't these the same guys that said the population in Dubai would fall 24%? Anything to keep their institution in the news with wacky projections!
Posted by real thing on 17 September 2009 at 14:38 UAE time
Rents at the marina are 1- 20% up from the absolute bottom in May - June. The world is recovering, see global stock markets up up up. the world dragged Dubai down and it will drag it back up with it. Hong Kong real estate is buzzing right now !! If you were waiting for the bottom then you just missed it...