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Dubai property prices, rents recover in June |
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06.29.2009 |
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Dubai property prices and rents recovered slightly in June due to easing pressure of distressed sales and vendors being unwilling to sell at current prices, signaling that the worst for the sector may be over, Deutsche Bank said Monday.
The average house price for apartments and villas rose 6.5 percent month-on-month in June to 1,285 dirhams ($349.9) per square foot, while rents rose 1.1 percent over the same period, Deutsche Bank said in its proprietary price index, which covers 13 locations in Dubai.
"Although monthly data should be viewed with caution given the limited number of transactions, recent numbers tend to confirm the stabilisation in the market we saw in May," said Nabil Ahmed, head of research at Deutsche Bank in Dubai.
"This might not be the bottom yet, but the worst increasingly looks behind us," he said.
The global financial crisis has taken its toll on the UAE's once-booming property sector.
The slump has so far wiped an estimated 50 percent off Dubai prices since their peak in August 2008, Deutsche said earlier this month.
In recent months, as the impact of the global crisis closed in on the emirate, real estate agents have reported softening demand and a lack of buyers, especially property speculators that helped drive steep price increases.
In recent weeks, there have been signs that the market is starting to stabilise, but many analysts are unsure when prices will bottom out or recover.
"We believe the stabilisation in prices was mainly driven by easing pressure from distress sales and potential remaining sellers now being unwilling to sell at current prices, off 50 percent from peaks on average," Deutsche Bank said.
"Our industry contacts confirm that prices have tended to stabilise, even increased in some areas, but the level of transactions/demand remains very low," it said.
Deutsche said it still expects property prices to bottom out at the end of the year after falling a further 15-20 percent.
"We continue to see risks of further weakness on the combination of expatriates' exodus during the summer and new supply flowing into the market in the second half of 2009. However, the worst regarding property prices increasingly looks behind us," Deutsche said.
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Source:business.maktoob.com |
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