Dubai property prices 'fall 41%'

Property prices in Dubai plunged 41% during the first three months of this year, a report has calculated.

The decline is from the last quarter of 2008, said global real estate consultancy Colliers International.

It is just the latest indication of the extent to which Dubai's property boom of recent years has come to an end in the face of the worldwide recession.

Colliers said prices had fallen as global finance has dried up and job opportunities in Dubai have declined.

Speculators exit

The firm's report measured property prices in parts of Dubai where foreign workers have been allowed to buy homes since the market was opened up in 2002.

The 41% drop in prices between January and March followed an 8% fall in the previous three-month period.

Colliers added that speculators - people who had bought property in Dubai as an investment - had already left the market.

It said prices were now likely to continue to fall, but it was too early to predict when the market would hit rock bottom.

"The heat has gone out the market completely," said Colliers' Middle East chief executive John Davis.

Dubai has enjoyed rapid economic growth over the past decade, led by a construction boom, as its ruler Mohammed bin Rashid Al Maktoum sought to diversify the economy away from its diminishing oil reserves.

It is one of the seven states that make up the United Arab Emirates.

Source: BBC News

Distressed property continues

The last 9 months or so, there has been a gradual increase in desperation amongst those looking to dispose of their properties in Dubai. Slowly but surely demand has ebbed away which initially caused a gradual slide in prices, although the pace of the falls has started to quicken of late. There are signs that new developments are in serious trouble and those who had literally doubled their money during the property boom are now counting the cost with many property prices back to where they started.

Among the more distressed property price sales reported of late include:-

A Palm Jumeirah garden home which sold for just AED5.8 million, a price which very few people thought they would ever see again. This is an approximate fall of about 50% from the highs reached only a few months ago.

There are also reports of distressed sales in Downtown Burj Dubai where properties are just not selling and investors are becoming more and more desperate to exit the region. There is a suggestion that one-bedroom apartments in the Burj Dubai (the tallest tower) are changing hands for just AED800k.

There is mention on the thread of a Palm Signature villa changing hands at just AED4.9 million against a valuation price of AED11 million in October 2008. Quite literally prices are continually falling and while there is some interest, buyers most definitely have the upper hand.