A large number of people in the United Arab Emirates (UAE) think that property prices are going to fall by another 20 to 30% this year.
Despite analysts, brokers and real estate agents reporting property price rises in some locations and various consultants predicting that the bottom of the market has been reached, potential buyers simply don’t seem to believe the hype.
Some 63.4% of people who took part in a poll organised by Arabian Business said they still expect prices to fall at least 20% and by as much as 30%. Just 5% think that the real estate market in the region has bottomed.
It seems that over supply issues and population shrinkage have resulted in a general pessimism. With thousands of jobless expatriates returning home now the school year has finished many think that will have an adverse effect on the UAE property market.
The poll results provide a rather more pessimistic view of the UAE real estate market than a recent Shuaa Capital survey into investor confidence. The Dubai based investment bank found that 19% of investors believed that the market had bottomed out.
However, the Arabian Business poll found that only 6.1% of people were optimistic that the market was now on the road to recovery. While, 25.6% played it safe, saying nothing was going to change until the end of the year.
Some consultants are also cautious. There has been a steady shift in property prices to a level that is likely to entice investors back into the market, according to Sherwoods Independent Property Consultants. But it describes this as a springboard towards recovery rather than a sign that a sudden recovery is imminent.
It expects to see concrete signs of growth in both property prices and real estate investments towards the end of the year and then 2010 will be a year of stabilization.