Tuesday, August 03, 2010

Dubai house prices dip 4percent in Q2 2010

The house prices in Dubai slipped four percent during the second quarter this year, said the latest report by Colliers International, the leading real estate consultancy.

According to the agency report, this is the first quarter-on-quarter contraction that has been reported in the past one year. The additional housing supply and declining rental incomes are likely to further mount pressure on the prices of housing.

Colliers had earlier reported that its index grew by 2 percent during the first quarter, in comparison to the final quarter last year.

Colliers expects about 33,000 new units to enter the market towards end of the year, less than its original estimate of 41,000, due to delays or re-scheduling of the project.

The Regional Director at Colliers, Ian Albert, said that on the whole, Dubai has 340,000 or more residential properties with 87% occupancy rate, and further declines are anticipated. The market cannot absorb the additional supply, unless there is an increase in population, and the release of stock is slowed down.

Albert also said that due to considerable drop in rentals, investors are hesitant about home ownership when it comes to income generation. This, coupled with other factors such as weakening demand, rigid mortgage approval processes, may all lead to surplus units in the market.

Colliers index data shows seven percent growth in overall house prices year-on-year, with total number of property transactions increasing by fifteen percent every quarter.

The apartment prices dropped by five percent while, villa and townhouse prices dropped by three percent and eight percent respectively, in comparison to the last quarter.

The maximum numbers of transactions were recorded by Arabian Ranches during the second quarter, followed by The Springs, Victory Heights, Downtown Dubai, and the Green Community.
However, in terms of pricing, The Palm Jumeirah Villas, Downtown Dubai, The Palm Jumeirah Apartments and The Lakes - Villas, were the top developments.

3 comments:

garhoud said...

It was a expected decline.The price will be back to normal shortly.

Mubawab said...

Hello, I have a site of classifieds ads, and real estate prices are declining on the overall in 2010, and nothing seems to indicate they will rise again on the short term. There are many empty houses and appartments, especially designed for exparts, and I do not see any increase neither in the job offering for expats... Prices will keep on falling until reaching their real value, which will probably be under the initial investments.

dubai rent said...

To see the impact you need to look at the recent prices not prices 7 years back, then you will see the crash. If you want to compare with prices 7 years back then you need to apply time value of money
Obviously, you may still not have lost after the crash because you bought 7 years back, and because you earned rent for 7 years / you lived in the property for 7 years, there is no denying that.http://www.bayut.com