(DUBAI) Dubai house prices have fallen as much as 42 per cent in the past six months and are likely to drop further as new homes are completed amid waning demand in the Persian Gulf business hub, Colliers CRE plc said.
Gloomy outlook: Prices are expected to decline even as estimates for the number of new homes coming onto the market are revised lower, to about 64,800 units between now and the end of 2011Prices will decline even as estimates for the number of new homes coming onto the market are revised lower, to about 64,800 units between now and the end of 2011, the property adviser said yesterday in an e-mail report. It had previously estimated 140,000 new units by the end of 2010.
It's 'reasonable to assume that as new stock continually comes online that the downward trend in the market will continue throughout 2009 and is unlikely to stabilise before the second- quarter of 2010', Ian Albert, the firm's regional director, said in the report.
The worst financial crisis since the 1930s has weakened the real-estate market in Dubai as banks curtailed mortgage lending and speculators pulled out. Expatriates who were fired by companies trying to weather the global recession are being forced to leave the country because of visa restrictions, Colliers said.
The rest of the Gulf, richer than Dubai in oil and gas wealth, is suffering less as crude prices lost almost US$100 a barrel from their US$147.27 peak last July. Abu Dhabi, capital of the UAE and holder of most of the country's oil and gas reserves, remains undersupplied with houses.
It already lacks 70,000 homes and will require more than 120,000 new units by the end of 2012, the report said. Doha, the capital of gas-rich Qatar, is also short of homes as its population rose by almost 40 per cent last year to 1.6 million. Some 9,000 apartments will be ready by the end of 2010, according to Colliers. -- Bloomberg
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