Analysts have revised their predictions of a sharp drop in Dubai's property market, saying a recent surge in property prices combined with a flood of people coming on to the rental market because of a villa eviction campaign will delay any price decrease.
"Demand will rise, and prices will follow as a result," said Cecilia Rabess, a senior analyst at Investment Boutique.
According to a recent Morgan Stanley report, Dubai property prices were due for a correction of at least 10 per cent by 2010, following a nearly 79 per cent increase since the beginning of last year. As a property-related downturn spreads across the globe, analysts have doubted whether Dubai will buck the trend entirely.
However, last week's eviction notices distributed by Dubai Municipality to families living in shared villas have led some to believe that a correction may be further off than previously thought.
Two months ago, a one-bedroom flat in the Dubai Marina area was renting for an average of Dh120,000 (US$32,600) a year, according to analysts. By the end of last week, it was nearly impossible to find one for less than Dh140,000. Over the past year, the sale price of villas in Dubai have skyrocketed by 76 per cent, while apartments have shot up 63 per cent, a survey by The National found last week.
Even Morgan Stanley, which first predicted the downturn, is now warning of a soft landing.
"The good news for Dubai is that you have underlying economic strength and, as a result, our base case reflects a soft landing for the emirate," Sean Gardiner, head of MENA research at Morgan Stanley, said last week.
Andrew Gilmour, an economist with the Samba Financial Group, said the fundamentals of the Dubai property market remained strong. "The demand is there and, so long as they can access the credit, I don't think you will see a particularly strong downturn too soon," he said.
However, if demand remained strong and prices continued to rise, "eventually it will become more a question of affordability," said Ms Rabess. "Prices can only go up so much before people will no longer be able to afford to live in Dubai."
Ms Rabess said the Government's campaign could have been intended to encourage people to move into apartments in places such as International City and Discovery Gardens, which they may have previously avoided in favour of sharing a villa. Eventually, however, it could push people outside of the city.
"Unless the developers start building more affordable housing, people may start looking to places like Sharjah or Ajman for places to live," she said.
The city began the villa eviction campaign in July, but declared a final 30-day deadline last week for all over-occupied villas in the city. Families in Jumeirah, Umm Suqeim, Al Rashidiya and Abu Hail were hit especially hard.
A spokesman for Dubai Municipality said last week: "No more notices would be issued to villas. Even those families who are sharing villas but have not received notices must move out within the deadline." Once the deadline expires, violators will have their water and electricity supplies cut off, and landlords would face heavy fines - up to Dh50,000."
The move comes at a time of increasing uncertainty in the Dubai property market, amid fears that foreign investors and the cash-strapped banks may cut off funding for local projects.
Cash scarcity could destabilise the market, analysts say, and possibly precipitate a fall in prices. Last Monday, the UAE central bank announced an emergency Dh50 billion lending facility meant to ensure banks have enough money to keep local infrastructure and property projects running.
In August, a Morgan Stanley report described Dubai the "bellwether of the whole GCC property market", saying that a drop in prices there could extend to Abu Dhabi and all of the other major economies in the Middle East. However, barring such a fall, Morgan Stanley predicted that Abu Dhabi could see prices increase by 25 per cent before 2010. Qatar's property market is expected to increase by 15 per cent during the same period.
"The Dubai real estate market is one of the real Achilles heels of the UAE economy," said Giyas Gokkent, an economist at the National Bank of Abu Dhabi.
* with Reuters
tpantin@thenational.ae
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Barcelona 3
Messi (27’, 32’, 87’)
Leganes 1
El Zhar (68’)
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
THE BIO
Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13
Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
Favourite place to travel to: Any walkable city. I also love nature and wildlife
What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents.
Favorite place to go in the UAE: A quiet beach.
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
Company%C2%A0profile
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Profile
Name: Carzaty
Founders: Marwan Chaar and Hassan Jaffar
Launched: 2017
Employees: 22
Based: Dubai and Muscat
Sector: Automobile retail
Funding to date: $5.5 million
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
more from Janine di Giovanni
Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Essentials
The flights
Emirates, Etihad and Malaysia Airlines all fly direct from the UAE to Kuala Lumpur and on to Penang from about Dh2,300 return, including taxes.
Where to stay
In Kuala Lumpur, Element is a recently opened, futuristic hotel high up in a Norman Foster-designed skyscraper. Rooms cost from Dh400 per night, including taxes. Hotel Stripes, also in KL, is a great value design hotel, with an infinity rooftop pool. Rooms cost from Dh310, including taxes.
In Penang, Ren i Tang is a boutique b&b in what was once an ancient Chinese Medicine Hall in the centre of Little India. Rooms cost from Dh220, including taxes.
23 Love Lane in Penang is a luxury boutique heritage hotel in a converted mansion, with private tropical gardens. Rooms cost from Dh400, including taxes.
In Langkawi, Temple Tree is a unique architectural villa hotel consisting of antique houses from all across Malaysia. Rooms cost from Dh350, including taxes.
Related
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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UAE currency: the story behind the money in your pockets
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Men from Barca's class of 99
Crystal Palace - Frank de Boer
Everton - Ronald Koeman
Manchester City - Pep Guardiola
Manchester United - Jose Mourinho
Southampton - Mauricio Pellegrino
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now