Residential asking prices for property in Dubai have plummeted 49% since the third quarter of last year with rents falling 35% in the same period, according to the latest published real estate report.
The figures from international property advisors Jones Lang LaSalle are the latest in a long line of price reports that show that the emirate is still suffering considerably from the effect of the global economic crisis and there are not yet any signs of recovery in the real estate market.
But the report does show that the rate of decline is slowing, giving hope that a recovery could be underway by the beginning of 2010. Overall values fell 24% in the second quarter of this year but the gap between asking and achieved price is narrowing, indicating that vendors are becoming more realistic in terms of the price they are asking, and buyers are prepared to invest.
Rents also fell less sharply in the second quarter, the report added. The average rent for a two bedroom apartment fell by 15 in the second quarter, compared to 22 in the first three months of the year.
Also the level of transactions has stabilised with volumes between the first and second quarters of this year levelling off compared with a 58% fall between the second quarter of 2008 and the same period in 2009.
Some 22,400 residential units are expected to be handed over in 2009, in spite of over $24 billion worth of residential projects being put on hold or cancelled, the report also points out.
‘The stabilisation of transactional volumes is an important indicator, which reflects improved confidence among investors. The narrowing gap between asking prices and achieved prices is a further indication that the market is beginning to stabilise, albeit at significantly lower levels of pricing than those seen earlier in the year,’ said Craig Plumb, head of research at Jones Lang LaSalle MENA.
‘While there have been a large number of projects delayed or cancelled, there remains a significant level of new supply, with around 22,400 residential units expected to be completed across Dubai in 2009,’ he added.
