Dubai Property Prices Falling
Monday, November 10th, 2008 
Posted by OP-Mall in 
Homes on Palm Jumeirah Island
It’s not news that Dubai’s property market is expected to experience corrections next year and according to Morgan Stanley gradually decline by up to 10 percent by 2010. However, a real bombshell was dropped last Thursday when Arabian Business reported that Palm Jebel Ali’s island prices have depreciated some 40 percent in the last two months.
After all the hype and excitement about Dubai’s market, this news is certainly a wake up call for many would be investors who are standing on the brink of making a decision right now.
This fall in property values has been pinned on the global crisis and current investors who liquidate their assets in Dubai in order to keep their cash flow going.
This turn of events puts the development (and more to follow for sure) back to where they were some two years ago. To make matters worse, local Dubai mortgage providers acted and reduced home financing loan-to-value (LTV) to about 70 percent down from 90 in October. Of course this isn’t helpful for those looking to finance a property loan right now.
Five and six bedroom villas on the island used to be valued at around 16 million Dirham (approximately $4.35 million). In the last couple of months however these prices were depreciated to 9 million Dirham instead - a huge loss for current property owners.
Despite this, they didn’t really lose out on a bargain since overall the value of properties on the island increased by as much as 80 percent from the original launch buying price.
As reported from various realtors in Dubai, sales have dried up and making them seems harder these days, unless they accept a significant drop in property prices.
It will be interesting to see whether those predictions will come true in the near future. As for now, it is probably a wise move to hold on the investment for existing property owners while new buyers can snap up a bargain.
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This entry was posted on Monday, November 10th, 2008 at 12:15 pm and is filed under Dubai Property, Jebel Ali. You can follow any responses to this entry through the RSS 2.0 feed.
14 Responses to “Dubai Property Prices Falling”
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DILIP SITLANI Says:
January 14th, 2009 at 7:35 amGUYS AND GIRLS WAIT THIS IS ALL A HYPE ..DUBAI MARKET HAS NOT BEEN AFFECTED ….WAIT TILL FEB2009 THIS DOWN FALL WILL PASS ITS FOR THE BETTER WHAT HAPPENED …THE SYSTEM HAS BEEN CORRECTED BY THE GOVERMENT AND THE SMALL TIME INVESTORS WHO CAME IN DOUBLED THE MARKET PRICE HAVE ALL FALLEN DOWN …ITS TIME TO RELAX YOUR MONEY INVESTED IN DUBAI IS GOING NO WHERE….ITS NOT DUBAI I CALL IT SECOUND HEAVEN…YOU WILL NEVER LOOSE MONEY HERE…JUST YOU SHOULD HAVE THE POWER TO STAND WITHHOLD YOUR INVESTMENT ..IT WILL DOUBLE FOR SURE….DONT PANIC…DONT BE SILLY….
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David Says:
January 14th, 2009 at 11:39 am@ Dilip - Bullocks! What a load of toss!
This year (2009), approximately 32,000 housing units would hit the Dubai market, this is after 27,000 units came on to the market in 2008.
And with the job losses in Dubai, triggered by the global financial crisis, many people are considering leaving Dubai.
A price drop rather that ‘double’ looks inevitable.
Also with a significant supply of units into the market over the next two years, prices, are bound to stabilise at the very least. -
David Says:
January 14th, 2009 at 11:40 amAnd I you forgot to switch off you caps lock.
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DILIP SITLANI Says:
January 14th, 2009 at 1:14 pmDear David ,
Sorry About The Caps was writing from my PdA which is quite silly i must admit !A Lot of people have their views i`ve lived in Dubai for 22 yrs and now moving between Singapore and India..
I said what i fealt and that is Firm Dubai is The only place in the world which is Safe…ppl are just Scared and its natural i dont balme them they have invested thier life time savings in to this market to earn a quick Buck,
if like i said have the B…s to wait watch i say feb mid 2009 these prices will go back atleast to 60% of what they have dropped.
Even if 20,000 units more are gonna be avail they are gonna be less …..lets wait watch iam holding mine …till the crows turn white….. -
David Says:
January 14th, 2009 at 10:32 pm@Dilip - If you are in the market for the long term, then I don’t see the need to panic. However, if you are speculating and are expecting returns or capital appreciation within the next 3 months, I’m afraid to bust your bubble but it ain’t going to happen.
There is a lack of finance in not only Dubai but the Global Economy. Prices are a reflection of confidence in the economy - people are leaving Dubai, there is a stock market crash and oil prices are falling, there will be further house price drops or a stagnation at the very least all through 2009 in Dubai.
The Writing is On the Wall. -
David Says:
January 14th, 2009 at 10:35 pmI would be looking at the Dubai market in 10 months time for deals as situation gets worse.
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The daily Bugle Says:
January 31st, 2009 at 9:32 amPoulation of Dubai is about 1.2M. Take out UAE nationals who have their own homes. Say 20% as per the official ratio. Left with 960,000. Take out another 50% of that who are labour and can’t afford to invest left with 480,000. Of these 480,000 non labour foreigners, how many are eligible for mortgages since salary requirment has shot upto AED20K with many banks. As all countries there are less rich people. So say take out another 50% of that- left with 240,000 (u know where this is going!!!) based on rough estimate of 4 persons per household. That is around 60,000 units. This does not take into account those people who will continue to live in rented accomodation and the fact that the poulation is reducing as people leave due to job losses. The problem is that the property were made for the rich which are out of reach of common people who make up the bulk of any society. there are more properties for the well off whilst the demographics are the other way round. Doesn’t add up. The only way they can boost the situation is to issue visas for property owners who can use Dubai as a safe haven from surrounding countries.
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Affan Says:
February 15th, 2009 at 6:18 pmWhat is the latest about Dubai property. Should the people invest or withdraw whatever they aledy had.
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Overseas Property Mall Says:
February 15th, 2009 at 8:46 pm- Don’t buy off plan.
- Property prices are not going up, focus on rental yields
- Mortgages are almost impossible to come by, so make sure you have adequate cash to invest.
- There are bargain to be gotten - buy property off desperate sellers - read the classified of local newspapers
- My advice is to buy property with Tenants already in it.
- There are lots of job losses, so vet your tenants thoroughly
- Location Location Location….location is important
Good luck.
Kunle Campbell
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Flüge Says:
February 25th, 2009 at 9:25 amIn my opinion the financial crisis has already reached Dubai and there is a possibility to buy properties for low prices. What do you think? Will the prices stay or increase? The Palm is very very beautuful and I think that many people would like to own a property like this.
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Kunle Says:
February 25th, 2009 at 9:56 am@Flüge - There is no doubt that this spells an opportunity for savvy investors buying the RIGHT type of units. I’ll however wait till the summer to see how things pan out - as there is always a slowdown in the summer.
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DILIP SITLANI Says:
March 3rd, 2009 at 3:54 pmSorry DAvid And The Rest Have been Away and just Logged in to See the comments you guys have posted….
Sure ppl have to wait…and yes i have gone and asked all my friends to Buy in the Dubai market..best time low prices and for sure it will double…but Clause…1 you have to wait….
Dilip Sitlani -
Fady Says:
March 27th, 2009 at 5:27 pmHi Guys,
We are already end March, and prices are still going down, until when do you think we should wait so we can invest in a property in Dubai?
Thanks
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Hussein Says:
May 31st, 2009 at 2:03 pmguys, i bought 3 properties in dubai last year when the price and time was right, just when i was abt to sell, to get a good amount of profit, the crisis shot up and was unable to sell at a reasonable amount…now the value of all my properties have gone down by 50%….please advice me on wat to do
:(
