Dubai House Prices Fall 20%

It has been claimed by Rasmala - A Dubai investment bank - that Dubai’s price of property has declined by 20%. The news comes after an additional 35,000 housing properties are expected to be completed in the region by 2013, bringing to total amount to around 330,000. The bank today made a statement regarding the situation on the United Arab Emirates’ property market. Essentially, the report stated that between 2011 and 2013, an estimated 30,000-35,000 new units of apartments and villas will be built to add to the existing ~330,000. The statement expresses the opinion that the ~10% increase over 3 years will depress the already sluggish real estate values. The bank’s analysts believe that residential sales in Dubai will bottom out at Dh600-650 per square foot which implies a potential 15-20% decrease in property prices. The bank’s analysts also believe that prices in Abu Dhabi will drop by at least 20%. The report estimated Abu Dhabi’s residential units would increase by ~40,000 between 2011 and 2013, which on an existing base of ~200,000 units is a 20% incremental supply over the three years being analyzed. Rasmala does, however, see some longer-term positives for the property market in the United Arab Emirates, saying that as the Arab Spring becomes less influential, prices will become steadier. Both Abu Dhabi and Dubai have a massive ex-pat community and it is anticipated that changes in the visa laws will deliver a positive impact. UAE residency visa tenures are currently six months but are to be increased to three years.