Property prices in Dubai have already dropped 48% since last year, and they are about to fall another 20% according to research firm Colliers International.
The global economic crisis has taken its toll in Dubai as in most other places, and as more completed developments reach the market, prices are falling quickly as demand drops away. This is not predicted to change until demand once again outstrips supply.
Dubai house prices, already nearly 60 percent off their peak, are set to drop another 10 percent before stabilizing, as supply continued to outweigh demand. The downward trend is unlikely to change in the short term due to further prime stock entering the market across a number of key landmark developments in the second half of the year,?? said Elaine Jones, the Chief Executive of Asteco. There is still a 25% oversupply of residential properties in Dubai. Thats around 340,000 residential units, with a further 34,000 set to join that number within the next two years.
Dubai that may still make it appear a boom town with its three palm-shaped artificial islands built by the developer Nakheel, but now it looks to be a false impression. As today of those three islands, only one has been completed and the others have now been put on hold. Another development of islands in the shape of a world map has also seen work cease.
It is not hard to understand how those speculators now feel who bought property just before the crash, with the global financial crunch is prevailing and with no signs of waning in near future, the rents of apartments and villas are set to go down month by month.