Friday, November 12, 2010

6 percent fall in house prices in third quarter

The prices of housing in Dubai declined further by six percent during the second consecutive quarter this year, thereby further widening the gap levels from the third quarter of last year, according to report by Colliers International.

The Regional Director at Colliers', Ian Albert, said that following a period of stable prices, a shallow, but lengthening slide in overall average prices is likely.

The decline in this quarter could possible due to anticipated summer slowdown, and the continued tightness in finance. Although there have been improvements in loan-to-value ratios and interest rates to a certain extent, the banks and financial institutions continue to remain committed to a conservative lending policy, typified by greater due diligence in the lending criteria, he said.

The Dubai House Price Index by Colliers' fell by seven basis points between July and September during the second quarter, while the average prices touched Dh.951 per square foot, marking a decline from the Dh.1,015 per square foot pricing in the second quarter.

The prices of apartments fell by 7percent, villas by 5percent and townhouses by 8percent during the third quarter, the report said.

Several investors are seeking to sell their present investments, while on the other hand, there are fresh buyers seeking attractive prices. This will make Dubai a more mature market, said Sudhir Kumar, Partner at Morrison Menon, the Consultancy.

Among all transactions, apartments constituted 32percent of the transactions, villas 50percent and townhouses 18percent. The transactions indicated a 4percent drop from the second quarter.

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