Dubai property prices rose 9%, says HCSI report

 Agreed property prices in Dubai rose 9% since bottoming in April, with the pace of decline in rents slowing and the emirate’s property sector showing signs of a pickup, a report said on Monday.
About 60,000 additional homes are expected to be built in Dubai by 2011, below consensus estimates of 90,000-140,000, investment bank HC Securities & Investment (HCSI) said.
“Although prices have started to see initial signs of recovery, rentals have continued to slide with no clear direction in sight,” it said in its report.
Property prices are down 30% from peak to trough, HCSI said. Consensus estimates were for a 40-60% fall, with no recovery likely before 2010 or 2011.
HCSI said prices had picked up since April due to improving sentiment and risk appetite, falling deposit rates, robust volumes and attractive rental yields.
Mortgage values and volumes have recovered to pre-crisis levels, rising 24% and 14% in October, compared with 7% and 6% in April, its said.
Rental prices, down 38% year-to-date, declined by just 2% in each of September and October, as weakened demand in Dubai has been helped by a significant spill-over of people from other emirates such as Abu Dhabi, Sharjah and Ajman, seeking relatively attractive rents.
Occupancy rates are expected to fall to about 70% this year, recovering to about 78% in 2010 and 2011, it said.
Abu Dhabi, capital of the UAE, is expected to be undersupplied by 75,000 homes by 2011, HCSI said.
Dubai and Abu Dhabi are expected to have cumulative shortage of 60,000 homes by end-2011, HCSI said.