By Arabian Business staff reporter
'State of the Market 2009' warns most demand from end-users for finished product.
Off-plan property sales in Dubai are “practically non-existent”, according to a new report released this week.
“State of the Market 2009”, published by Better Homes and Investment Boutique, warns that “off plan sales across the emirate are practically non-existent, and finished product is in demand mostly by end-users.”
The report adds that “there is still substantial room for price depression in order to meet true affordability levels.”
However, on a more positive footing, it suggests that “by the last quarter of 2009 prices are expected to hit a trough and the market is expected to gradually stabilise.”
The 100-page report was compiled over the past three months, and contains detailed analysis of the residential, commercial, retail and hospitality sectors.
“The report shows that we are going through very challenging times, where prices, targets and ambitions will have to be dramatically altered. This is a painful process,” said Better Homes managing director, Ryan Mahoney.
It comes just days after revelations in the new rental index from RERA of a sharp decline house prices across the emirate.
A three bedroom villa in The Springs should cost between AED140,000 and AED160,000 a year, a maximum of a 50 percent discount on the previous guideline rent of AED250,000 to AED280,000.
A two bedroom apartment in the Marina on old pricing levels was AED150,000 to AED180,000 a year. Tenants can now expect up to 36 percent fall in rent of AED120,000 to AED160,000, according to the index.
If I am reading this correctly then prices are expected to fall considerably further in the coming 6 months and are expected to stabilise thereafter. Well at least the R word was not used.
The real estate position over all is not very encouraging at this stage and of course Off plan sales in nothing but dream. It is really very sad for those investors who had inveted in Off plan and they are not aware of the outcome of the structure. The RERA should come up with strict regulation for the developers who had kept the monies of investors in Escrow accounts and have not yet started the projects. Since the prices have come down by 30% to 40% and those of last one year and in those cases, the developmers who have not started should come forward alike some prominent developers who agreed to pass on the benefits to investors. But there are some developers who neither want to return the monies to investors nor they want to pass on the benefits of reduced prices due to existing crisis. Now it is the turn of RERA to come into picture and work out some good regulations for investors and developers. Good luck.
This is no surprise as the buyer have no prtection for construction delays or for no completion. The new RERA amendment even entitles developers to confiscate buyer's money if they ae unable (for reason beyond their control???) to start construction I have paid so far 55% of the price of a property, the progress is below 10% and I have no guarantie the developer will ever complete the job There is a need for a complete overhaul of the property law by people who are not controled by the developers. Otherwise it will be foolish to buy off plan properties in Dubai.