Property prices are expected to fall further as the global economic slowdown continues to hit the sector, according to analysts.
Compared with figures last July when the market peaked, the total fall in property prices by the end of this year is predicted to be up to 60 per cent in Dubai and about 20 per cent in Abu Dhabi, according to Roy Cherry, a research analyst at Shuaa Capital.
"2009 will be a dark year for the real estate sector," said Mr Cherry. "We expect the first half of 2009 to potentially realise further drops, with stronger declines in Dubai than in Abu Dhabi."
The first half of the year will be the most challenging in Dubai, with asset values reaching new 24-month lows, increased defaults on off-plan property and growing issues with payments, according to a note on the outlook of 2009 by Shuaa Capital's research team.
Dubai's property prices fell up to 40 per cent last year as high-profile corruption scandals in the sector picked up pace during the summer months. Residential property up until July last year had reached all-time highs. Off-plan primary market properties in Downtown Burj Dubai and DIFC were selling for Dh45,000 (US$12,249) to Dh55,000 per square metre, an increase of about 100 per cent in less than a year. However, as hot money left the market and banks began to restrict lending to developers and contractors in August, the sector began to struggle, analysts say.
"Most of Dubai's gain [in real estate growth from 2007 to 2008] has evaporated due to the recent crisis that we've seen," said Mr Cherry.
Shuaa analysts warn that Abu Dhabi's property sector, while more resilient than Dubai's, is not immune.
"It's more of a sentiment-based correction that we're seeing in Abu Dhabi; fundamentals say the market is strong, yet there is a negative reaction due to what's happening in Dubai and the severity of it," said Mr Cherry.
Abu Dhabi's population is likely to grow but at a slower pace than last year, meaning that short-term demand growth will also be suppressed, according to Shuaa's research note. Fundamentals remain strong, however, with the residential property market witnessing extreme shortage and rising rents. Residential property prices had been rising until last October. In the 12 months from Oct 2007 to Sep 2008, Abu Dhabi prices of apartments increased by nearly 90 per cent, according to Colliers.
Abu Dhabi occupancy rates are expected to remain close to full levels and rents to stay on the rise, according to Shuaa. In the past year, Abu Dhabi rents are estimated to have risen by 65 per cent in spite of a 5 per cent cap on rent renewals.
Although the Abu Dhabi market is expected to see fewer transaction activities and perhaps a further drop in asset values in the first two quarters of this year, growth is expected in the following quarters.
"Fourth-quarter results will give some indication of where we're going, and the second half of 2009 will give us a better ability to assess how the crisis has impacted the sector," said Mr Cherry.
For the moment, Mr Cherry expects further corrections in the property sector as long as uncertainty remains high, economic data is limited, project funding remains an issue and job security levels remain low.
While relatively optimistic about transactions in the second half of this year, he does not expect a sudden rebound. "The days and liquidity of 2008 are long gone and won't be seen for some time to come."
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
ALL THE RESULTS
Bantamweight
Siyovush Gulmomdov (TJK) bt Rey Nacionales (PHI) by decision.
Lightweight
Alexandru Chitoran (ROU) bt Hussein Fakhir Abed (SYR) by submission.
Catch 74kg
Omar Hussein (JOR) bt Tohir Zhuraev (TJK) by decision.
Strawweight (Female)
Seo Ye-dam (KOR) bt Weronika Zygmunt (POL) by decision.
Featherweight
Kaan Ofli (TUR) bt Walid Laidi (ALG) by TKO.
Lightweight
Abdulla Al Bousheiri (KUW) bt Leandro Martins (BRA) by TKO.
Welterweight
Ahmad Labban (LEB) bt Sofiane Benchohra (ALG) by TKO.
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR) no contest.
Lightweight
Mohammed Yahya (UAE) bt Glen Ranillo (PHI) by TKO round 1.
Lightweight
Alan Omer (GER) bt Aidan Aguilera (AUS) by TKO round 1.
Welterweight
Mounir Lazzez (TUN) bt Sasha Palatkinov (HKG) by TKO round 1.
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR) by KO round 1.
UAE currency: the story behind the money in your pockets
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
The specs
Price: From Dh180,000 (estimate)
Engine: 2.0-litre turbocharged and supercharged in-line four-cylinder
Transmission: Eight-speed automatic
Power: 320hp @ 5,700rpm
Torque: 400Nm @ 2,200rpm
Fuel economy, combined: 9.7L / 100km
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
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