Dubai landlords who are refusing to sell units at “distressed prices” are holding back the real estate sector from recovery, analysts have said, according to a report on Wednesday.
The National reports that analysts said investors are keen to come to Dubai, but only if they can buy up properties in prime locations for lower prices.
Mohammed Kamal, head of property at Hogan Lovells, speaking at a Cityscape panel, said: “It’s difficult convincing the owners to let go. Investors want a distress price, but sellers are in denial that they are in distress,” the paper quoted him as saying.
Head of property investment and advisory business at Allied Investment Partners, Simon Townsend, told the paper that unless the market recognised the fall in house prices the number of buyers would remain limited.
Property prices in Dubai have fallen more than 50 percent from their peak at the end of 2008 in some areas. Owners, however, are reluctant to sell top quality buildings in prime locations, like The Palm and Dubai Marina, at today’s lower prices.
On Monday, Bank of America Merrill Lynch said Dubai’s property market may have reached a “floor”, but that a further 44,000 vacant units are set to come into the market this year.
The lender, in a note to investors, wrote that it expected average residential prices to fall by a further 15 percent in 2010.
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