Bank predicts fall in Dubai property value

Property in Dubai could fall in value by as much as 60 per cent during the course of 2009, one United Arab Emirates investment bank has claimed.

Shuaa Capital has cited negative population growth, project cancellations and lack of mortgage availability as some of the reasons for its forecast, with prices not expected to stabilise until the final quarter of the year or the start of 2010.

"'Prices in Dubai could lose 50 to 60 per cent by the end of 2009 from their peak last summer," analyst for the bank Roy Cherry explained, noting that it will be "tough" for the market to demonstrate "resilience" during the first six months of the year.

The prediction follows a recent report by real estate firm Asteco, which found that rental rates for apartments in the emirate levelled off throughout 2008.

Average growth for such properties was four per cent, the study found, with the rental market improving since the suspension of loan issuance by some banks.

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