Values, and confidence, in Dubai are declining for first time in six years. Rising concerns over a much-expected property price correction, crystallised by a Morgan Stanley report predicting a 10 per cent price decline by the end of 2009, grew over the quiet months of the summer and the holy month of Ramadan.
September’s global financial turmoil heightened nervousness in the country’s property and stock markets. HSBC said yesterday that October prices fell 4 per cent in Dubai and 5 per cent in the UAE capital, Abu Dhabi.
Speculators are exiting their property investments, sending prices down for the first time since the boom started in 2002, when Dubai opened the property market to non-Gulf Arab buyers.
'A correction could be a blessing in disguise. We had an overheating market,' said Marios Maratheftis, an economist with Standard Chartered.
Mohammed Alabbar, the chairman of Emaar, the property group, said this week the government had set up an advisory committee to balance supply with demand, an indication that the government might be considering slowing future projects to provide the market with a soft landing.