Even though the worldwide recession has died out and a gradual resurgence is being noticed in the global scenario, the woes of Dubai real estate sector are far from over. What ails the pertinent sector then? Well, if we rely on industry analysts, there are indeed a great number of factors and as per them, residential real estate prices in Dubai are set to fall a further 10% in 2010 with the emirate’s debt problems expected to slow down a property recovery until 2012.
In accordance with median forecast of 12 analysts at banks, investment firms and research institutions of late, property prices in the Gulf emirate have only a 13% chance of turning around prior to 2011. All these came forward during a tête-à-tête with the Reuters and from the talk it was found that only one of 13 respondents said prices had reached a bottom, whilst four said they expected a trough to be reached in the first half of this year, three in the second half of 2010 and four in the first half of 2011, the poll showed. One said prices would not bottom out until at least the second half of 2011.
Can you recall the incident that led to wonder? It happened only in November when Dubai
said it would ask creditors of Dubai World, the corporation behind its rapid expansion, and Nakheel, builder of its iconic palm shaped islands, to agree to a standstill on billions of dollars of debt as a first step to restructuring. On the word of Fabio Scacciavillani, an economist at the Dubai International Financial Centre, the recent woes of Dubai World have further sapped the prospects of a recovery in real estate.
As stated by, Keith Edwards, head of asset management at The First Investor in Qatar, situation in the UAE property market will remain weak in 2010 as a consequence of unfavorable demographics, property oversupply and risks associated with cancelled or delayed projects.
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