The rate of decline in Dubai residential property prices slowed in the second quarter of this year with values falling some 9%, according to the latest analysis from real estate consultants Colliers International.
The figures have prompted some confidence in the industry with some experts breathing a sigh of relief and saying that it shows that the big summer property crash that many expected has not materialised.
Colliers said that the better than expected performance was down to a 50% increase in transactions from April to June and a slight easing of mortgage availability. Residential property prices are now down 48% on a year-on-year basis, back to levels they were last seen at in the second quarter of 2007.
However, it warned that financing still remains tight and said that expatriate job losses and lack of transparency from developers over project delays and cancellations were the main reasons behind the 9% drop in the second quarter. But it is still a major slowdown in the real estate market decline. In the first quarter of 2009 property prices in the emirate plummeted 42%, according to Colliers.
‘After a significant decline in the first three months of the year the market witnessed a deceleration in the rate of decline in residential prices in the second quarter. Thankfully the magnitude of the decline that occurred in the first quarter of 2009 was not, and is now very unlikely to be repeated,’ said Ian Albert, regional director at Colliers International.
He said that in the coming months the market will be searching for further evidence of market stabilisation as it draws nearer to the bottom of market prices. ‘However, the results of the third quarter are traditionally distorted by the summer holidays and the holy month of Ramadan, and we would expect the fourth quarter of 2009 to be a better indicator of future trends,’ he added.
Marcello Sambartolo, head of marketing at propertyfinder.ae, Dubai property prices in July do indeed appear to be flat as the real estate market was grinding to a standstill.
‘The big summer crash tenants and buyers were hoping for did not materialise. As everyone walks on eggshells, the market appears to be coming to a standstill rather than performing any huge fluctuation,’ he said.