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Dubai house prices fell 41% in Q1 - Colliers
Tuesday, 28 April 2009
PRICE FALL: Colliers International says property prices in Dubai have fallen by 41 percent during the first quarter of the year. (Getty Images)
House prices in Dubai plunged 41 percent in the first quarter of 2009, property consultant Colliers International said on Tuesday.
The huge fall in values came as cash and mortgage-backed transactions dropped sharply, with prices registering a negative year-on-year decline for the first time of 34 percent, Colliers said in its latest quarterly House Price Index.
The consultant blamed the fall in prices on lack of mortgage availability, poor investor sentiment, job losses among expatriates, and delayed projects, which have hit demand.
“Without any support from previous quarters Q1 2009 clearly represents the impact of the global crisis on the real estate market,” the report said.
“During Q4 2008 the UAE experienced the first real symptoms of the impact of the global financial crisis on the region; however the negative impact averaged over the three month period was softened as it included transactions initiated during late Q3 and being concluded in early Q4,” it added.
House prices have collapsed in Dubai in the wake of the global crisis and a regional liquidity crunch, making mortgage provision scarce.
In the final quarter of 2008, Colliers recorded an 8 percent drop in property values in Dubai.
Last week Swiss Investment bank UBS said real estate prices could drop 70 percent from their peak last summer.
In the report, Colliers said apartments and townhouses were the worst affected, falling 42 percent in first quarter of this year, compared to the final three months of 2008. Villa prices dropped 40 percent, it said.
On a positive note, the global real estate consultant said there was evidence of improved liquidity at the end of the first quarter 2009, but added it was unclear what effect this would have on the housing market in the medium term.
The Colliers International House Price Index was set up in January 2008 with six leading lenders to measure the average rate of growth or decline of house prices in Dubai.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Global impact
Posted by lucyfromjumeirah on Wednesday 29 April 2009 at 09:47 UAE time
It seems that there are both global and local reasons for the severe drop in prices. I agree with Geriant that local issues, such as job security, too much focus on high-end rather than affordable housing, and mass speculation have driven up prices unsustainably at a local level.
But as a regional hub, with only a small percentage of revenue from oil money, dubai is particularly at the mercy of the global economy. Global finance and trade is down, and this has a big impact on Dubai. I believe that Colliers noted this in the press release, and it seem obvious that if the global economy and oil revenues recover, then Dubai will be in a much better position to then deal with the local issues it faces.
Posted by lucyfromjumeirah on Wednesday 29 April 2009 at 09:47 UAE time
It seems that there are both global and local reasons for the severe drop in prices. I agree with Geriant that local issues, such as job security, too much focus on high-end rather than affordable housing, and mass speculation have driven up prices unsustainably at a local level.
But as a regional hub, with only a small percentage of revenue from oil money, dubai is particularly at the mercy of the global economy. Global finance and trade is down, and this has a big impact on Dubai. I believe that Colliers noted this in the press release, and it seem obvious that if the global economy and oil revenues recover, then Dubai will be in a much better position to then deal with the local issues it faces.
fall in property prices
Posted by m a gehani, toronto, canada on Tuesday 28 April 2009 at 21:17 UAE time
are they cuckoo it must be 91%
Posted by m a gehani, toronto, canada on Tuesday 28 April 2009 at 21:17 UAE time
are they cuckoo it must be 91%
Fall in real estate Prices
Posted by Madjedi, Paris, France on Tuesday 28 April 2009 at 17:32 UAE time
I fully agree with Mr Geriant comments
The bubble has burst and the market is looking for a floor
However, taking the developer side and not providing basic protection to buyers as RERA is doing will not retore buyer's confidence and I do not see a floor yet
Posted by Madjedi, Paris, France on Tuesday 28 April 2009 at 17:32 UAE time
I fully agree with Mr Geriant comments
The bubble has burst and the market is looking for a floor
However, taking the developer side and not providing basic protection to buyers as RERA is doing will not retore buyer's confidence and I do not see a floor yet
Its the fundamentals, my dear Watson
Posted by Geriant, Dubai, UAE on Tuesday 28 April 2009 at 15:12 UAE time
“Without any support from previous quarters Q1 2009 clearly represents the impact of the global crisis on the real estate market,” the report said.
Do the learned researchers at Colliers actually believe the collapse of Dubai property has anything whatsoever to do with the global crisis? They are daft to state such inaccuracies and besmirch their company's good name. Dubai property has collapsed in spite of the global crisis, and anyone with half a brain knows and admits that. Blaming the global crisis for the failure, completely, of Dubai property is like saying the windows at Burj Dubai are dirty because of the desert winds. Talk about fundamentals not being sound and an industry run by fundaments,
Posted by Geriant, Dubai, UAE on Tuesday 28 April 2009 at 15:12 UAE time
“Without any support from previous quarters Q1 2009 clearly represents the impact of the global crisis on the real estate market,” the report said.
Do the learned researchers at Colliers actually believe the collapse of Dubai property has anything whatsoever to do with the global crisis? They are daft to state such inaccuracies and besmirch their company's good name. Dubai property has collapsed in spite of the global crisis, and anyone with half a brain knows and admits that. Blaming the global crisis for the failure, completely, of Dubai property is like saying the windows at Burj Dubai are dirty because of the desert winds. Talk about fundamentals not being sound and an industry run by fundaments,
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