The UAE’s property market, which suffered one of the biggest crashes during the global crisis, is gaining momentum. House prices have fallen by around 60% from their Q4 2008 peak, according to Jones Lang LaSalle, but positive economic growth, strong government support, and mortgage lenders returning to the market are helping property prices stabilize, though local analysts are generally pessimistic about future price prospects.
The residential property price index rose slightly by 0.8% in Q4 2010 from the previous quarter, down 6% on a year earlier, according to Colliers International Middle East.
During 2010 real estate transaction values in Dubai plunged 65%, according to Jones Lang La Salle. And while demand fell, oversupply kept on rising. In Q3 2010, less than 600 transactions were completed, significantly down from 1,200 during the same period in 2009.
LaSalle expect house prices to decline by 10% in 2011, and around 5% in 2012, contrary to the government’s hopes.
(Please see current opportunities to the left of the page)