(WSJ - 4th of August 2009) DUBAI -- Home values in Dubai have fallen by about half from their peak late last year in the wake of the global real-estate slowdown, a widely watched index of Dubai property prices showed Monday. [...][The report is mainly bullish, still trying to revive the idea that buying homes in a desert make you rich, but there's one bearish statement in the whole report:]
Saud Masud, a real-estate analyst at UBS, said a decelerating price fall doesn't necessarily point to market recovery. "The underlying trends are not supportive of a recovery in the market anytime soon," he said.
(AFP - 16th of August 2009) DUBAI — Just one year ago, property prices in Dubai were surging to record peaks undeterred by a real estate slump in major markets, but they have since gone into free fall and have yet to find the bottom.And the same story applies to Qatar. These bubble economies are bound to collapse, there is no other ending possible. And when depopulation becomes a major issue, you know the end is near...
Market watchers in the former Gulf boomtown differ slightly on the magnitude of the decline so far, but all seem to agree that the prices of Dubai property, which was selling unchecked over the past three years, should drop further.
"The decline in prices still has a little bit to go before bottoming out," said Sana Kapadia, vice president of equity research at the regional investment bank EFG-Hermes. "We expect a total drop in Dubai of between 50 to 60 percent from peak prices in 2008. We have seen a cumulative decline of 45 to 50 percent so far in Dubai," she told AFP.
It would be a terrible mistake to believe that we are out of the woods," said Jeremy Mayhew-Sanders, head of investments and development at Sherwoods Property, referring to such few recovery signs.
He said that some prices had improved due to an artificial shortage of units on offer in some areas, as low prices had pushed some owners to pull their units from the market.
But a shortage of new housing units -- a major catalyst for the surge in prices and rents over the past few years -- should be the least worry for buyers as thousands of new units are being delivered this year, with more scheduled to be ready next year.
"Many under-construction projects are nearing delivery time, bringing more units into the market... There is a lot of supply that has to be absorbed," Kapadia said.
Landmark Properties projects some 22,700 residential units to be delivered by the end of this year, with 40,400 others to be delivered in 2010, although many projects have reportedly been put on hold for lack of cash and interest.
Qatar is facing a significant oversupply of real estate in 2012 as its population falls, leaving swathes of property development empty, according to two new reports.Finally, looks like the new way of making profits of real estate in Dubai is legal claims:
This could lead to a 'significant overhang' of real estate, they claim. 'While expatriates constitute 90% of the workforce, which is similar to Dubai, a much bigger portion of those are blue collar workers who are more likely to leave in 2012,' the bank report said.
The company is also warning about de-population. Al Mansoory said that the latest published figures show that it has already fallen from 1.9 million to 1.6 million. [That's 15-20% !]
The collapse of Dubai’s once-booming construction industry has created a backlog of legal claims totalling almost £3 billion.Of course, even if legal claims and fees will add to GDP, they are destroying value, not creating wealth in the general sense for the population.
Disputes over unfinished contracts and outstanding payments are stacking up in the emirate’s arbitration court, according to Building magazine.
This year, more than 180 claims have been filed, mostly by international contractors. British firms are estimated to be owed at least £400m on contracts in the United Arab Emirates, many of which relate to work for state-backed investment and development firms.
Atkins, the £700m support-services giant, is among the firms to have publicly admitted being owed money in Dubai. Forensic accountants and legal experts are starting to flood in. Price Waterhouse Coopers has moved a team of 20 investigators to the emirate in recent months.