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HomeWorldAbu Dhabi house prices to fall 25 percent in full year 2009

Abu Dhabi house prices to fall 25 percent in full year 2009

 Dubai house prices will fall another 20 percent this year, as the former boomtown continues to suffer a sharp economic downturn, a Reuters poll showed. Residential real estate prices in Dubai — home to man-made islands in the shape of palm trees and the world’s tallest building — have a less than 20 percent chance of picking up before 2011, according to the median forecast of ten analysts at banks, investment firms and research institutions.
Three of 10 forecasters said they expected prices to hit a bottom in the second half of 2009 and three predicted it would happen in the first half of 2010. One forecaster said prices would rise by 10 percent from now in 2010.
Five analysts expected prices to fall a further 20 percent or more this year and prices could fall an additional 15 percent next year before stabilising in 2011, the poll showed.
“We may see a further drop in prices as the magnitude of the problem in the sector is still high and the recovery of the sector may take some more time,” said Sajeer Babu, an equity analyst at National Bank of Abu Dhabi, which participated in the June 2 to June 9 poll. For full poll results, click on.
Property prices in the seaside emirate have slumped since late last year, when the global financial crisis and a drop in oil prices ended an economic boom in the Gulf Arab region.
Hundreds of billions of dollars of projects have been cancelled in the United Arab Emirates, Dubai firms have laid off thousands of employees and UAE banks have been loathe to extend new mortgage loans.
More than half of the construction projects in the UAE worth $582 billion, have been put on hold, Dubai-based market research firm Proleads said in February.
Rents in Dubai are seen declining by 40 percent for the full year 2009 and a further 10 percent in 2010 before recovering in 2011, the poll showed.
While it indicated that house prices for 2009 will fall an average of 50 percent from a peak in the third quarter, it is likely that prices for off plan properties, or properties still under construction, will fall in excess of that.

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