UAE still not in property recovery

The property market in Dubai has been criticised, with some analysts claiming that prices in the emirate will continue to fall.

According to a new report by Bank of America Merrill Lynch, the real estate sector in the destination is still a long way off from becoming a mature market.

The organisation claims that property is "fragile" and the level of transactions currently taking place is "weak".

Writing in its recent report, Dubai - aftermath of a bubble, the bank says that it expects prices to tumble by another 15 per cent this year - on top of the 45 per cent decline witnessed during 2009.

"We think it is still early days in terms of clearing inventory and we would need to see a convincing rise in transactional activity before calling the bottom," the report said.

"Potential buyers are still credit constrained and lacking confidence, while sellers demonstrate balance sheet strength and holding power."

Officials in the UAE are starting to clamp down on developers who are stalling on commencing new builds.

The Real Estate Regulatory Agency for the region is cancelling projects which are unlikely to start and allowing investors to recoup their money.

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