Fourth quarter property prices to drop

The fourth quarter of 2008 will likely show "a drop in overall residential prices" in Dubai, the property consultancy Colliers International said in a report released on Wednesday. The Dubai House Price Index has shown a declining rate of growth for prices in Dubai since the beginning of the year. In the third quarter prices grew by only five per cent compared to an increase of 43 per cent in over the first quarter.

However, prices increased by 80 per cent from the third quarter of 2007 to the the third quarter this year, the report found. "It is clear to us that the landscape has changed since the end of September," said Ian Albert, regional director for consultancy services. "The deceleration in the rate of growth seen in the first three quarters is attributable to the demand-supply dynamic of Dubai, but since the end of September a new factor, namely a shortage in liquidity caused by the international financial crisis has impacted the market."

bhope@thenational.ae