No change in Dubai property market for another year
According to the latest reports about Real Estate, there are no signs of recovery of the property market in Dubai till the end of 2010.
The prices saw a downslide of nearly 50%, but the buyers are more concerned with the rental than with the purchase of property.
The review of the United Arab Emirates real estate and construction sectors has shown that only the property in the prime locations is being transacted.
Despite the Abu Dhabi property being fundamentally strong, the global financial crisis has finished the demands of the investors; thereby crashing the prices of the property, especially of off-plan property.
The report, forwarded by the analysts, said: "With relatively low buyers' confidence in Dubai, together with our view that demand will continue to focus on the rental market as supply is absorbed, we do not anticipate any strong recovery in Dubai selling prices before the second half of 2010 at the earliest."
According to EFG, there has been a steep fall in the rents in Abu Dhabi and large number of the property owners are not selling or renting their property as they are waiting for the prices to pick up.
The report also said, "Over the next six to 12 months, we believe we could see a further, possibly smaller, tranche of distressed transaction activity. This may negatively impact pricing and rental trends further, and so prolong any anticipated recovery for the market."
Abu Dhabi property market may further be affected as the people are going in for cheaper accommodation in Dubai.
The report further mentions that that some of the long term projects of Aldar and Sorouh, the two top developers in Abu Dhabi, may slow down and fall in line with the changing market dynamics. According to bank, it might be difficult for Aldar to repay the short to medium term debts, where as Sorouh shall require additional funds for the project which are to be handed over after 2011.
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