Monday, December 15, 2008

Dubai residential sector at its "tipping point": HSBC

Dubai housing market could be nearing "tipping point", states HSBC, in its monthly housing index on Thursday.

Despite the rise in housing prices by five percent during the third quarter of this year, in contrary to the drop during the previous month, the overall picture of property sector seems to be that of a rapidly cooling market, the bank reported.

There has been a 36 percent increase in the number of people willing to sell their properties in November, but it seems that investors are turning away from the market, while the market indicates slow growth in prices and there is a scarcity in mortgage availability too, due to the global economic condition.

The said report by HSBC, follows the last month's report by the bank, which said that property prices in Dubai fell by 4 percent between September and October 2008, while the prices of villas tumbled by 19 percent.

Leading property consultant, Colliers International, last week warned that although the residential prices grew 5 percent during third quarter of the year, the values are likely to drop during the final quarter of 2008.

According to the HSBC report, the Abu Dhabi property market, which had been considered a much safer investment option than Dubai, too saw a 1 percent dip in property values

However, the research from the Citigroup, the investment bank, has expressed confidence on Abu Dhabi property market, stating that the emirate has been able to finance all its current projects due to massive budget surplus and sovereign wealth funds, contributed by the soaring oil prices during initial part of the year.

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