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Dubai’s property dilemma
Real estate industry reports seem slightly contradictory when it comes to deciding whether Dubai’s property sector has stabilized or not.
January 19, 2010 2:39 by Aarti Nagraj
Dubai’s real estate sector is finally stabilizing, with house prices rising around 1 percent in the fourth quarter of 2009 as compared to the previous quarter, according to the latest report released by Colliers International. The Q4 prices however represent a decrease of 42 percent compared to the same period in 2008, and are currently at the same levels as the second quarter of 2007, says Colliers’ House Price Index. The average house price for Q4 2009 is approximately AED 1,022 per square ft compared to AED1,770 per square ft during Q4 in 2008.
“We anticipate price fluctuations will become less pronounced as the market matures, providing early indications that Dubai house price values are getting closer to underlying values,” said Ian Albert, regional director, Colliers International in a release.
“We now seem to have reached the point where the market is trying to find its natural equilibrium. While we have tracked marginal variations in the performance and prices of property types, it remains to be seen how the market will react to further news of Dubai World’s debt restructure as well as the banks’ end-year results,” he said.
The same view was shared by property services company Asteco, which said in its latest report that residential property sales prices “stabilized towards the end of 2009.”
The average sales price in Dubai stood at AED950 per square foot for apartments and AED1,000 per square foot for villas, said the report, adding that there was no change in prices between the third and fourth quarter.
“Lifestyle communities are weathering the storm and the Palm Jumeirah is an iconic development and, with continuous improvement of infrastructure and completion of residential and hotel developments, has become a sought-after destination,” Asteco CEO Elaine Jones said in a release.
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