Real estate values in Dubai could plummet by 60 percent by the end of 2009, according to UAE investment bank Shuaa Capital.
Property prices in the emirate have already dived by 40 percent and rents could fall by 20 percent over the next two years, Shuaa analyst Roy Cherry said.
"Prices in Dubai could lose 50-60 percent by the end 2009 from their peak last summer."With negative population growth, expected delivery of 35,000 units in 2009, declining occupancy rates, lack of mortgage funding, high job insecurity, and cancellation of visa guarantees for home buyers, it is going to be tough for the market to show resilience at least in the first half of 2009.",” he said.
Declining occupancy rates to around 80 percent would cause rents to ease, he added. Global economic unrest has burst Dubai’s six-year long property bubble as well as hitting the wider real estate market in the UAE.
Cherry said Abu Dhabi would not be immune from the real estate slump, predicting prices have so far plunged 15 percent and could slide a further 20 per cent. Prices would start to stabilise in the final quarter of 2009 or early 2010, Cherry said.
Echoing a report by Swiss investment bank UBS last week, Cherry predicted Dubai’s population could fall five percent this year on job losses, with the overall UAE population easing 1 to 1.3 percent. Dubai has a population of about 1.4 million.