We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Wed 21 Jan 2009 09:37 PM

Font Size

- Aa +

Dubai property prices slump 23% in Q4 2008

Real estate prices fell sharply in Q4 2008, according to a new report from HSBC.

Dubai property prices slumped by 23 percent during the last quarter of 2008, with villas showing a more marked decline than apartments, HSBC said in a report on Wednesday.The emirate's once-booming real estate market has slowed as a result of the global financial crisis, as prices fall, developers scale back projects and jobs go.

Average prices for villas in the emirate fell 30 percent from September, but were up 33 percent year-on-year, while prices for apartments declined 20 percent from September last year, but were up 16 percent on the year.

"The December 2008 data also points to a 23 percent decline from the September 2008 peak," it said.

Dubai property prices rose 19 percent year-on-year.

"Transaction data also suggests some signs of distressed selling in Q4 2008. Our analysis of December data indicates there were a small number of units sold at prices that fell short of estimated construction costs," the report said.

Transaction volumes were down from the November 2008, but were healthy, it said.In the first two weeks of January this year there were 1,782 transactions, up 6 percent from December 2008 and a 175 percent rise year-on-year.

"Typically, there is a one-month lag between sale and registration, which means that January 2009 data reflects December 2008 transactions. The pick-up in volumes is despite the number of holidays ... during the month. We think this implies a recovery of liquidity within the market."

Advertised rentals continued to rise, increasing 9 percent month-on-month, but the bank expects rents to ease as more units are converted from sale to lease.

Dubai property prices could fall as much as 60 percent in 2009 from their peaks last year, Shuaa Capital said on Sunday.

Rental rates for apartments and villas have been levelling off throughout 2008 with an average growth rate of 4 percent and 8 percent respectively, property services firm Asteco said in a recent report. (Reuters)

Arabian Business: why we're going behind a paywall

Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.
Peter 11 years ago

Yet another fudged report on the decline in prices. You simply can't take seriously this unaudited approach to what is Dubai's most serious problem -- the loss of confidence in property. Anecdotal evidence suggests declines in huge figures, yet the self-serving and guilty parties keep relying on compliant media to report their unscientific drivel. People are dying from this, and families are losing everything. Yet the spin continues. Time to fess up to the reality. Property died. It isn't a great time to buy, because too many investors are pretending it ain't so.

omar 11 years ago

The prices will fall by more than 75% in 2009. 60% as Shuaa predicted is way too conservative. Prices will go to the 2006 level although i hope they will go to the 2004 level!Please give us a break- Yesterday i was speaking to a friend abroad and were discussing the real estate market - He simply told me that prices in Dubai can not be more expensive than the luxurious port of Marbella, Spain or Cannes, French Riviera. All Dubai prices were beyond imagination and they must become realisitic by going down 75%!

Ashis K Maity 11 years ago

Why we publish so many reports which doesn't substantiate the fact. All these facts and figures / statistical data about slump in demand , prices fall etc. are different from each and every day which is not practical in real economic index. One day you publish demand falls by 25 % in last quarter of 2008 and very next day you publish it has fallen by 23 % for the same period and as studied by some XYZ bank/ agency. Which is not just the correct way of publishing data but misguiding people. There is a report says rent has reduced by 5 % but in reality rent has increased for all by 5 % at minimum and some cases it's more. Govt declared a rent cap on 20th of January when 90 % of the landlords already renewed the contract in Dec'08 with 5-15 % hike in rent. Why we try to create so much of confusion? can't we be more realistic and publish the fact ? It's only encourage people to spread rumour and actually a negative impression about the country's economic strength.

nick 11 years ago

I disagree with Omar ; prices should be higher in Dubai than Marbella because it costs 25% in fees and taxes to buy and sell a property in Spain and there is inheritance tax in Spain and there are only two months of the year when the weather can be guaranteed in Andalucia ; the schools are better in Dubai too . the Spanish do beach bars , bull fights & flamenco better though but thats about all.