According to a recent report by Colliers International, property prices in Dubai will fall even further over the next 18 months and will not start to increase for the foreseeable future. 71% of developers polled stated that property prices had not yet bottomed out.
A well-respected Kuwait-based investment bank has said that the outlook for the UAE real estate market remains negative.
Kuwait Financial Centre, also known as Markaz, said in a report that oversupply in the property market would likely constrain demand and impede economic growth. Markaz said it expects the UAE’s real gross domestic product to grow this year by 0.7 per cent, down from 5.8 per cent in 2008.
Dubai house prices will fall by up to 70% from their peak levels, says Swiss investment bank UBS. Having said that, we have seen prices for property for sale in Dubai already down to these levels, so this may actually be an optimistic outlook. There is a good argument that Dubai’s luxury property market will never recover, given the underlying fundamental issues – Pollution, falling expatriate populations, lack of laws to protect small investors, and an almost total lack of transparency. Top this off with the liquidity crisis in the financial system, and you have a recipe for disaster.
