By Daliah Merzaban
Investment bank says high-end real estate units taking biggest hit among Dubai players.
Residential property prices in Dubai have fallen 25 percent since peaking last September, with high-end real estate units in the Gulf emirate taking the biggest hit, Morgan Stanley said.Real estate prices in UAE capital Abu Dhabi are also down an average of 20 percent since a peak last summer as the UAE's property sector is dealt a "worse than expected" blow by the global financial crisis, Morgan Stanley said in a research note.
"Anecdotal evidence suggests sharp falls in transaction volumes in the fourth quarter due to deteriorating economic conditions, the disappearance of speculative buying and the lack of financing," the bank said in the Jan. 30 note.
Since September, Dubai apartment prices have fallen 25 percent and villa prices are off 26 percent, "belying the argument of some developers about the prices resilience of villas and low-rise building segments", Morgan Stanley said.
Prices of high-end Dubai properties - including those at the Burj Dubai development that includes the world's tallest tower, as well as the manmade Palm Jumeirah - are down 35 percent since their peak, the bank said.
Dubai's building boom has unraveled since the autumn amid a worsening global financial crisis that has led to scores of job losses and project delays.
Some $263 billion worth of projects in the UAE have been delayed or cancelled, Morgan Stanley said, citing data of Middle East business information website Zawya.
Morgan Stanley said real estate units at Aldar Properties' Raha Beach development had suffered a near 30-percent downturn in prices since hitting a peak last summer.
Rents in Dubai, meanwhile, were down seven percent in December from a peak last summer, while the cost of renting villas had declined 10 percent, the bank added. (Reuters)
While I wouldn't admit it to my wife, I am inclined to break my code and believe an estate agent for the first time in my life. The anecdotal "evidence" he offers is a lot more believeable than the Morgan soft-serve. Maybe some of the boys at Morgan have their fingers too deeply in the Dubai property pie and are hoping for a blackbird.
it will go down more than 60%, i am offering my flat for 50% from orginal price, but no one is showing any interest for the last 3 months.
We stopped payments on two flats. Lost 120K. But it was a good decision. We could buy the same two flats now for 35% the original price. We are making payments on another flat also. But considering stopping payments on that one too. It makes no sense paying for a flat that is coming down in value by the day. I think within a year we will see prices down by 80% UAE wide.