Freehold property prices in Dubai, have dropped by as much as 70 percent, since March last year, but are set to bottom out in another six months, predicted the property brokers on Sunday.
The once-booming real estate sector in Dubai will continue to witness the ongoing sharp corrections, until the fourth quarter of this year. Thereafter, the prices may remain stable in 2010, and the early signs of recovery will be seen in 2011, the brokers said.
The property prices in Dubai had undergone a major boost, by the increasing expatriate population, speculative investments and huge construction costs.
The drastic downturn during the end of 2008, and the first quarter of this year, is evident across several major developments within the emirate.
The Managing Director of New World Capital, a Dubai-based property brokerage firm, said the average price for a villa at the Garden Homes project has dropped from a high of Dh.15mn one year ago, to Dh.6mn, marking a 60 percent drop. Similarly, the average price of housing units at Signature Villas on Palm Jumeirah, dropped to Dh.12mn from Dh.22-25mn, a year ago. The apartments at the Jumeirah Lake Towers, too, are now available for Dh.700 per square foot, in comparison to the price of Dh.1500 per square foot, sold a year ago.
However, the price decline has been not so harsh for the low-cost developments. The price of a single bedroom unit at the International City, dropped from Dh.700,000 to Dh.400,000, while the price of a studio, fell from Dh.500,000 to Dh.275,000.
The market has also seen huge drop in rentals in both residential and commercial sectors. However, the drop in rent rates are more pronounced in certain areas of New Dubai, wherein rents have dropped by 40 percent. The Sales Manager of M.S. International Property, Najeeb, said that flats in the Al Ghusais area, which were rented for Dh.120,000 last year, were now available for Dh.70,000 marking more than a 40 percent discount.
Bank finance is a crucial factor for market recovery, as several projects are either on hold or delayed due to lack of liquidity. Developers, on their end, have taken few measures to re-vitalize the sector. Emaar, for instance, has offered 25 percent discount on its standpoint projects. Posted on 30/3/2009
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