Dubai real estate deals down as investors stay wary
Though villa properties continue to outperform apartments, lease rates tumbled 10 percent year-on-year with smaller houses worst-hit by the declines, the report said.
Average lease rates for two-bedroom apartments fell 26 percent year-on-year, reflecting an oversupply of townhouse units in Jumeirah Village and the Mirdiff area, CBRE said. Five-bedroom villas saw a two percent decline year-on-year.
Property prices in Dubai soared after the city opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments.
From start-2007 to mid-2008, prices rallied almost 80 percent, Morgan Stanley estimates showed, with billions of dollars worth of new projects launched by local developers.
But home prices in Dubai, the Gulf property market that had the biggest reversal because of the financial crisis, fell more than 60 percent in the wake of the global credit crunch.
Jones Lang LaSalle said in September the emirate had shown small signs of recovery with house prices increasing in prime areas and the number of transactions rising. But analysts remain concerned that the estimated 33,000 new homes expected to hit Dubai’s market by end-2012 could cause fresh declines in rental and sale prices.
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