Property experts tell ABTV why Dubai’s real estate market has yet to hit bottom.
Property prices in less desirable areas of Dubai could see further price falls of 10-15 percent, property experts have told Arabian Business TV.
Although Dubai’s real estate sector is starting to show some signs of recovery, a two tier market is emerging with more established areas such as Downturn Burj Dubai and Dubai Marina commanding more than areas on the outskirts of the emirate.
“We’re expecting to see drops of probably 10-15 percent, maybe even more in some areas,” said Charles Neil, CEO of Landmark Properties.
“These are areas where new deliveries are going on; they are usually typically outside the centre of Dubai, places like Silicon Oasis, Remraam, Jumeirah Park [and] Jumeirah Triangle projects, which are all coming on for delivery in 2011.”
Real estate prices in Dubai have declined by nearly 60 percent since their peak in 2008 when the emirate was hit hard by the global financial crisis. In oil-rich Abu Dhabi, which weathered the financial crisis better than Dubai, prices have already fallen 45 percent from their peak.
Despite further declines as fresh supply floods the market, experts say some areas are starting to see signs of recovery.
“I think we’ve got positive news going forward for the best located components of the market [and] I think probably the worst is over but some still have some falls in value to come,” Nick MacLean, managing director of real estate consultants CB Richard Ellis.
Last month the UAE’s Minister of Economy, Sultan Al Mansouri, said the property market had bottomed out and will start showing signs of recovery by the end of 2011. “I believe the worst is over for property. And in my estimation, at the end of 2011 and beginning of 2012, we will see positive movement,” he said. “It won’t be a graph like before, but we will see growth which is gradual and more realistic,” he added.