Please do not show again Close
Wednesday, November 25, 2009  | 
select country C
 
select country

BREAKING NEWS | Builders look abroad amid Dubai slump
EUR | GBP Up 1.109 ,  USD | EUR Down 0.667 ,  USD | GBP Down 0.602

One in four homes empty in Dubai -Colliers

An aerial view shows a residential area in Dubai. Photograph: AFP
DUBAI - One in four homes is vacant in Dubai and a quarter of office space lays empty due to oversupply and additional supply coming onto the market will continue to put pressure on prices, Colliers International said on Wednesday.

The property services firm said in a report the emirate will have 340,000 residential units by the end of the year, with and another 34,300 expected to come online in the next two years.

Meanwhile, leasable commercial space is expected to double to six million square metres by 2011, Colliers said.

“The survey indicates a market beset with falling demand and oversupply evidenced through increasing vacancy levels and falling take up rates,” it said.

“The gap between demand and supply is expected to amplify due to a significant increase in forthcoming supply.”

The city, which led the regional construction boom for years, is grappling with massive oversupply at a time of reduced demand and a lack of home financing.

Developers launched thousands of projects during the boom years, but are now struggling to find buyers after prices plummeted more than 50 percent in the wake of the global financial crisis.

Analysts have forecast prices could fall as much as 33 percent further before the market bottoms out.

More than 70 percent of developers surveyed by Colliers during last week’s Cityscape real estate exhibition believe the market has still not found a bottom and expect prices to fall further due to the supply overhang.

Only 25 percent said they thought prices had stabilised and that the market had hit the bottom.

Only 23 percent of the developers believe that the Dubai real estate market will start recovering in 2009, whilst 75 percent expect a recovery starting in 2010, Colliers said.

Colliers said 18 percent of developers said they have suspended sales until the market has “recovered sufficiently”. Eighty percent of those developers are based in Dubai.

It said rents, which have fallen close to 50 percent over the past 12 months, are also likely to fall further as demand drops and supply increases.

To keep updated with the very latest news sign up to the Maktoob Business newsletter now.
Maktoob Business
User Comments
Samson
Oct 15, 2009 at 09:14
The rents have always been a problem for the middle income group. When rents skyrocketed, employers gave subtle increase & the houses were out of reach. Now, employers have cut good amount from salaries but rents have not dropped reasonably. Again, houses are out of reach!
Roger
Oct 15, 2009 at 12:19
I fully agree with Zahra... Enough is enough...Landlords earned more than enough during the past few years and now it is time to wake up and smell the coffee... If they insist on not dropping their rent charges, surely in no time as we all aware of, plenty more new released building will be available and shall he regrets and we all be glad and happy... I hope tenants nowadays discuss better rent rate and not to accept no nonsense and walk away as I believe surely they will find better rate in another better area... Just be patient guys - and SMART.
Aslam
Oct 15, 2009 at 08:04
Lost confidence in Dubai. I bought an apartment from Al Attar, two years no progress at all. Likewise there are many such horror stories, for sure I will never opt for Middle East countries where rules are not fair and keep changing, no security, compensation.

For more comments on this story, click here.
Add Your Comment
Name:
Email:
City:
Code:
Comments:
0 of 1000
 

Ranking
Colliers International
136th most read about company
543rd most written about company
100th most discussed company
12th most emailed about company
Batelco slapped with $13.3 mln fine
11/25/2009 9:22:48 AM
1 | |
Excellent .. If you are a monopoly.. you've got to pay.. I wonder when TRA will fine Etisalat for charging the highest rates for data in the world.. 114$ per mb per month compared to 4$... MORE
UK builders chase $331 mln unpaid Dubai bills
11/24/2009 7:10:16 PM
1 | |
What about the Irish investors that have bought off plan as far back as 2006? We have over half our units paid for and work has not even started yet and they will not tell us if it is ever... MORE
Dubai in image makeover with exec shake-up
11/24/2009 7:09:09 PM
1 | |
It is about time that Sheikh Mohammed got rid of the egomaniacs that ran these companies. Having worked for Emaar, I can attest to the incompetence, inexperience, cronyism, nepotism and... MORE