Stabilization seen in Dubai Property Market
According to the latest report from property consultants Jones Lang LaSalle, the Dubai residential property market appears to have stabilized. At the end of the second quarter of 2009, the drop in achieved prices - that is, the amount a seller receives compared to the amount asked - slowed to 6%.
In addition, in spite of the many projects being put on hold or cancelled, there is a substantial supply of new units coming on line. More than 22,000 residential units are predicted to be finished, for all of 2009. Transaction volume was steady between the first two quarters, with the year-over-year numbers falling 58 percent.
Asking prices for properties have decreased by 49% from their peak in the third quarter of 2008, however; the decrease of rates slowed in the second quarter of this year. In
2009, the asking prices have dropped more sharply than achieved prices.
Craig Plumb, Head of Research at Jones Lang LaSalle MENA said: "The stabilization of transactional volumes is an important indicator, which reflects improved confidence among investors. The narrowing gap between asking prices and achieved prices is a further indication that the market is beginning to stabilize, albeit at significantly lower levels of pricing than those seen earlier in the year."
"While there have been a large number of projects delayed or cancelled, there remains a significant level of new supply, with around 22,400 residential units expected to be completed across Dubai in 2009."
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