Dubai Property Prices Could Fall: Banks Become Aggressive In Pursuing Repossessions

From the current levels, the property prices in Dubai could fall by another 30 percent. According to the analysts by the end of the 2011, somewhere around 150,000 homes could be lying empty. The UBS has forecasted that there will be a blow to the emirate’s property market with the prices down by up to 50 percent. It is also reported that Palm Jumeirah which is one of the most iconic developments in Dubai has seen its first repossession.

An analyst Saud Masud said, “We reiterate our view that by end of 2011 Dubai property oversupply on residential and commercial properties may reach roughly 40 to 50% and house prices may decline another 30% from current levels.” He further added, “We estimate total Dubai housing supply by the end of 2011 to be roughly 360,000 with oversupply potentially at 150,000 residential units.” Property investors in the UAE may find it cheaper in the auction market up to 40 percent as higher default risks ignite to more bank repossessions.

The bank sold the apartments in the exclusive man made island Palm Jumeirah for AED745 per sq ft which became a symbol in Dubai real estate market. Last week the owner’s bank took over the three bedroom apartment in Al Shala on the prestigious development. It was taken back after he failed to resolve the Dhs1.7 million of outstanding debt. Quickly the bank moved to shift the property. A number of repossession orders on properties in Dubai have been won by the UK based Barclays and now the banks won’t hesitate in order to follow the suit.

According to a banking analyst at an investor service, Antoine Yacoub banks will now become aggressive in practicing a legal action. They were trying to restructure most of their loans, however, once a precedent has been set, more cases will be encouraged to put through.

Changes Witnessed in Property Scenario of Dubai

Dubai is one of the steadily and consistently growing economies in the world and is witnessed as a great business centre. The global environment of the emirate has in turn contributed a massive influx on people and businesses from all over the world. Dubai real estate sector as we all known play a major role and at times there are consistent figures in order to prove the changes witnesses in the property market in Dubai. If we talk about the changing price scenarios, Dubai property prices since the start of 2007, have surged 79 percent. By the year 2010, these are likely to fall by 10 percent on various real estate units.

Moreover, if we look at other from other perspective, then property in Dubai is the fifteenth most expensive real estate market in the world. However, in 2009, the property rates for the residential units are all set for a downfall. If we look at the current scenario, the real estate prices have begun a downward journey resulting in a dip of 15 to 20 percent by the year 2011. The state of the market concluded that the prices are likely to hit the bottom during Q4 in the year 2009.

Various leading real estate agencies and property developers have said that the impact of the global slowdown in sale of real estate projects and these cutbacks will affect up to 50 percent of few of its departments. Regular property market evaluations are done by industry experts and they keep on evaluating the updated property market research and scenario. Moreover, different evaluations can be done in case of rental and sale properties as their market trends might differ from each other.

For more property rates in Dubai, contact us.