Has the UAE property market bottomed out?
HSBC says maybe. According to the bank, property prices in Dubai rose in April and May, indicating a possible comeback for the nation’s real estate sector.
May 31, 2009 1:41 by Dana El Baltaji
The increase in apartment prices, however, is not an indicator that the real estate market has recovered: “We will not be able to discern a sustainable trend until later in 2009,” said the bank. “And while we note these positive developments, the market as a whole is coming off a very low base, given the sharp declines since the market peak. Credit growth remains subdued, and the UAE economy still has challenges to deal with.”
Meanwhile in Abu Dhabi, Landmark Advisory – a research arm of Landmark Properties – notes an increase in sale transactions in developments such as Arabian District in Al Reef Villas and Marina Square and Sun and Sky Tower in Al Reem Island. Jesse Downs, director of research, explains: “There has been a noticeable increase in terms of sales as more developments are nearing completion. We have witnessed more end-users emerging as buyers as they become more confident in investing in the market again and we expect this interest to increase as more units become available.”
According to Landmark, Abu Dhabi’s apartment prices have fallen between 5 percent to 10 percent since the end of the first quarter of 2009, and a total of 30 percent since the third quarter of 2008. Villa prices have begun to even out, in spite of a 45 percent drop since the third quarter of 2008.
So, is the nation’s property market starting to stabilize, or are investors in for more months of volatility?
It’s hard to tell, especially since short-term forecasts of the nation’s property market, specifically Dubai’s, are negative; according to an EFG-Hermes report published last week, Dubai’s prices are likely to fall by as much as 50 to 60 percent by the end of this year from their peak in September 2008.
What do you think?
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