House prices in Dubai could fall a further 30 percent from current levels and up to 150,000 homes could be lying empty by the end of 2011, UBS has said.
"We reiterate our view that by end of 2011 Dubai property oversupply on residential and commercial properties may reach roughly 40-50 percent and house prices may decline another 30 percent from current levels," analyst Saud Masud said in a research note.
"We estimate total Dubai housing supply by end of 2011 to be roughly 360,000 with oversupply potentially at 150,000 residential units," he added.
Masud also said property investors in the UAE may find prices to be 40 percent cheaper in the auction market as higher default risks lead to more bank repossessions.
“It would be difficult for buyers to overlook the distress level pricing in the auction market as compared to secondary markets,” he said. “Early trade-offs may be liquidity, quality, location and variety.”
His research note followed an Arabian Business report on Tuesday which revealed that Dubai’s man-made island Palm Jumeirah had seen its first property repossession.
The property was sold by the bank for AED745 per sq ft, 35 percent less than the current market rate.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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