House prices in Dubai plunge

Monday, a UAE-based consultancy firm said that due to the global economic recession, the prices of house in former boomtown Dubai tumbled in the second quarter, as the market in the Gulf emirate continues to stumble.

It did, however, also mention that prices are likely to stabilize by the end of the year.

In the three months ended in June, vis-à-vis the same period in 2008, the Colliers International's Dubai House Price Index plunged by 48% on concerns related to financing, expatriate job security and lack of transparency on project delays.

However, in the second quarter, the rate of decline had come to 9%, compared with a 42% plunge in the first quarter, as per the Colliers.

In the second quarter, the average price rate for residential property dropped by 949 dirhams (259 dollars) per square foot or 10,215 dirhams (2,783 dollars) per square metre; as against 1,037 dirhams (283 dollars) per square foot or 11,162 dirhams (3,041 dollars) per square metre in the first quarter.

No directly comparable figures for the second quarter of 2008 were given by the firm.

Ian Albert, regional director at Colliers, told AFP said: "What we are seeing really is a rapid deceleration, indicating that we are reaching a bottom. In the coming months, the market will be searching for further evidence of market stabilization as we draw nearer to the bottom of the market prices."

He added: "Going forward, we will reach stabilization in the fourth quarter."

Colliers told that the prices of real estate, which by the second quarter fell by half from their peak in the third quarter of previous year, have bounced back to levels last seen in the second quarter of 2007.

"The index is compiled using mortgage data from financial institutions representing 60 percent of the mortgage market in Dubai, and analyses price trends for both completed properties and those still under construction," said Ian Albert.