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Mon 2 Nov 2009 02:13 PM

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Dubai house prices 'bottomed out in April' - study

New report claims prices have risen 9% in past six months after 30% drop from peak.

Dubai real estate prices bottomed out in April and have risen 9 percent since, HC Securities & Investment said on Monday.

Consensus estimates for the amount of real estate that will enter the market in the next two years are overstated, and the peak-to-trough decline was smaller than many analysts were expecting, the brokerage said in a research note.

HC Securities believes around 60,000 units will hit the market by the end of 2011, compared to other analyst estimates that range between 90,000 and 140,000.

“Our Transaction Price Index suggests that the Dubai property market bottomed out in April 2009 and has since rebounded by 9 percent, following a 30 percent peak to trough drop,” a team of analysts wrote.

The factors behind the rebound include improving sentiment and risk appetite; a negative real interest environment; and attractive rental yields, the firm said.

Mortgage values and volumes have recovered to pre-crisis levels, reaching 24 percent and 14 percent of total transaction values, respectively, in October this year, compared to 7 percent and 6 percent in April, it said.

More recently, UAE mortgage lenders have raised their loan to value (LTV) ratios, relaxed lending criteria and lowered interest rates in line with the declining interbank lending rate.

The Dubai-based brokerage said that asking rentals in the emirate have been declining for nine months, dropping 38 percent, but that the pace of decline was slowing.

Arabian Business: why we're going behind a paywall

John 10 years ago

Never heard of this crowd, but they clearly are looking for publicity because nothing in this report/press release indicates where they are getting their numbers from. There is not a single fact in this story, but here it is again, claiming the green shoots have become palm trees in the sky.

Paul Welsh 10 years ago

From this crowds website you can read the following: "HC offers investment banking, asset management, securities brokerage and research services. We are based in Cairo, Egypt and have a joint venture in Dubai, UAE with the Al Futtaim Group." JV with Al Futtaim group. They have absolutely no vested interest in talking up Duabi of course. Wonder who paid for the research? 30% peak to trough drop. Havent I been reading of 50% plus?

SR 10 years ago

2008 October - Crisis will not affect us 2008 December - Crisis has not affected us 2009 March - Crisis has not affected us 2009 June - Crisis has not affected us 2009 September - Summer exodus did not happen so there was no crisis Present - Crisis is over!!!!

John B 10 years ago

There's certainly a tough bunch of Dubai skeptics out there ! Some of whom have been and possibly still are enjoying a great dubai lifestyle but do not want to let any opportunity to talk it down pass them by ! keep it up guys you are certainly helping out if the report isn't.....

Paul Welsh 10 years ago

We just would like all the nonsense to go away and focus on what to do to help. Why the obsession with real estate? You cannot sustain an economy on this. A sound real estate market comes from a stable population in a country with transparent rules. Is that what we have here?

John Thomas 10 years ago

Why sugar coat it?? If everyone had spoken the truth from the begining, the city would not be in the Real Estate mess it is in... Why call it pink when it is black??? It is reality and better face it, acknowledge it and work towards a solution then deny it!! Of course that mantra doesnot really apply to Dubai - shame as it could be an amazing city if people were not in Denial (not just a river in Egypt)...

Simon 10 years ago

this is the most accurate report I have seen which is reflective of the situation on the ground. one will be able to relate to this if one has been in the market trying to buy a property in dubai. analysts should be congratulated to report findings that go against the current market trend that is hard to accept by many...

John B 10 years ago

Dubai is doing a great job by leading most regional countries in many areas and we should encourage it and give it a chance to grow providing constructive feedback & useful suggestions, if we can come up with any, rather than taking cheap shots and fault finding. Just like Rome wasn't built in a day neither would Dubai reach the best in class but it is good to note that they want are striving to unlike some of the neighbours. Look at California, Ireland and many other very transparent economies that are on the verge of bankruptcy despite all the transparency and other laws, regulations and controls that we can wish for.

Graham 10 years ago

This article says that mortgage lenders are making it easier by increasing Loan To Value and decreasing rates. This is not what i have seen in dubai, several mortgage lenders departed the market, plus Tamweel and Amlak seem to be in limbo waiting for the Government to sort them out and i am paying 8.6% for a dirham based mortgage when the dirham is pegged to the dollar and dollar interest rates are close to zero.... so the local mortgage lenders are under funded and nobody externally wants to lend them money so they borrow locally at about 6%.... this unfortunately is reality and if nobody externally wants to fund it you do have to ask why ? and where is all the local funding ? invested in a sovereign wealth fund in London, New York and Tokyo ?

M. Mouse 10 years ago

I certainly don't see see any reduction in mortgage interest rates, as usual there is nothing of substance to back up all the brash statements made by this outfit