Dubai property slump..

Dubai property will continue to drop for the next two years, extending a decline in the Persian Gulf sheikhdom that’s already cut values by more than 60 percent since the 2008 peak.

Residential values will fall as much as 20 percent more by the end of 2012if new homes are built as planned, according to broker Landmark Advisory in Dubai. Cluttons LLP, a London-based property consultant, and Jones Lang LaSalle Inc., the second- largest publicly traded commercial property broker, also forecast further declines.
About 48,000 homes will come on to the market in the next two years, or about 12 percent of existing supply, according to WorldWatch director of research . An influx of foreign buyers sparked a construction boom as prices rose by 79 percent to mid-2008 from 2007 before the financial crisis caused lenders to tighten credit and speculators left the market.

There is still no parity between supply and demand,about 35,000 homes will be completed through 2012.You’re looking at a good two years for Dubai’s market to reach bottom.
If crude prices continue to rise this situation will be even worse for Dubai and surrounding Nations.
Emaar Properties PJSC, Dubai’s biggest developer and the builder of the world’s tallest tower, reported a 7 percent drop in third-quarter profit, missing analyst estimates, as costs and writedowns increased. Construction firm Arabtec Holding PJSC saw earnings slump 96 percent, while apartment and office builder Deyaar Development PJSC reported a loss. Home prices
fell 6 percent in the quarter from the previous three months, Colliers International said on Nov. 7.
Almost half of Dubai’s planned real estate projects, from offices to villas, were canceled as buyers defaulted and access to funding became harder. Residents who lost their jobs had to leave the country within 30 days, causing many to abandon their cars and mortgages.

Without an influx of demand from outside the country, WorldWatch estimates that home prices will drop 5 percent to 10 percent by next summer.
Attracting foreigners became more challenging after the government changed residency rules last year. From 2002, property ownership qualified the buyer for a five-year residency visa that was easily renewed. That changed in May 2009, when new United Arab Emirates regulations cut the length of residency visas to six months and required holders to leave the country and
return for renewals, paying 2,000 dirhams ($546) per visa each time.

The law also says a property must be worth at least one million dirhams and be large enough to accommodate the number of people granted residency as a result. In addition, it requires the buyer to have monthly income of no less than 10,000 dirhams as well as medical insurance.
Home prices will drop 15 percent to 20 percent by 2012 if the most residential buildings currently under construction go onto the market as scheduled.
If the crude price control below $83 a barrel is delayed, that will only prolong the cycle, until prices come down further and buyers have greater certainty over long-term rent yields.