Dubai house sales seen falling 2% in 2010 - study

Kuwait Financial Centre report also says house loan lending will 'remain flat' this year.
Dubai house sales seen falling 2% in 2010 - study
By Andy Sambidge
Wed 07 Apr 2010 07:32 AM

Real estate transactions in Dubai are forecast to contract by up to two percent in 2010 before stabilising further in 2011, a new report has said.

Kuwait Financial Centre (Markaz) said an upturn in the property sector would coincide with a return to population growth, which it saw happening only in 2011.

"The segment contracted in all metrics such as transactions, rentals and prices and is expected to contract further during 2010," the report added.

The prediction indicates the start of a turnaround for the real estate sector that has seen house prices plummet by more than 50 percent from 2008 peaks.

Regarding rentals, Markaz expected instability to remain in the market with supply of homes continuing to outstrip demand in the short term.

The report said that the house loan lending would "remain flat" during 2010 as Dubai banks react to the negotiated settlement of the Dubai World debt standstill.

On the demand for Dubai offices in 2009, Markaz said rental values had shrunk by between 24-60 percent while sales prices had declined by 35-70 percent - hit by lower demand caused by a lack of office jobs creation.

The report said more office projects were due to come onto market this year which could "drive up vacancies and drag prices and rentals down in the short run until 2012".

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