Property industry analysts have already published dire figures for the Dubai property market but real estate brokers fear they are proving even worse than predicted.
Freehold property prices in Dubai have plunged by as much as 70% since March of last year, real estate agents say but expect them to bottom out in another six months.
The disclosures indicate that those involved at grass roots level have seen prices fall severely and although there are variations, the steep decline appears universal.
‘We have seen prices plummet across Dubai’s property sector by 50 to 70% to the level of 2005. We expect the plunge to continue for the next six to eight months to bring prices down to their original level five years ago,’ said Mohammed Khan, Managing Director of New World Capital, a Dubai-based real estate brokerage.
Dubai’s property prices, propelled by a swelling expatriate population, speculative investments and rising construction costs, surged by 25% in the first half of 2008 over the first half of 2007.
But because of the global downturn a drastic decline set in during the last quarter of 2008 and first quarter of this year, especially for higher priced property. The price decline has been less severe for lower cost developments but still considerable.
A drop in residential as well as commercial rents is also evident, brokers said. The slide has been more pronounced in areas of New Dubai, where rents have fallen by up to 40%.
Hafiz Sohail Ijaza, Property Consultant at Wood Bridge Real Estate, expects the property market will remain balanced in terms of supply and demand through 2009. ‘We don’t see a recovery for the off-plan property sector till 2010,’ he said.
Abstract from source www.propertywire.com
