Dubai property prices on road to recovery

Tuesday, May 11, 2010

Dubai property prices on road to recovery

Dubai property prices on road to recovery The average price of a residential property in Dubai appreciated by two per cent in the first quarter of 2010 (Q1 2010), compared to the same period last year, according to the latest property price index compiled by Colliers International.

Dubai home prices have now increased by four per cent since the last quarter of 2009 (Q4 2009), suggesting that the Dubai property market may now have hit the bottom of the cyclical downturn.

Dubai property values have plummeted by up to 60 per cent across some parts of the emirate since late 2008 and this has contributed towards a significant fall in property transactions.

But with some signs of stability in the underlying market, prices are starting to improve at a more sustainable and steady pace. Dubai property prices have now returned to 2007 levels.

The Colliers International report shows that the average price of a home in Dubai in Q1 2010 was AED1,061 (£195) per square foot, compared to AED 1,022(£187) in Q4 2009.

The greatest property price rise in the Q1 was recorded in the apartments sector, up six per cent compared with the previous three months, while villa prices increased two per cent and townhouses depreciated four per cent.

However, there are still grave concerns about the oversupply of properties in Dubai. Ian Albert, regional director at Colliers International, says:

"Despite the stability that the market appears to have achieved, a number of concerns remain. There will be significant oversupply in the market by the end of the year so it is anticipated the index will experience fluctuations in value going forward."

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A Place In The Sun