Dubai residents: house prices to fall up to 20%

House prices in Dubai will fall up to 20 percent by the end of the year, readers in an Arabian Business poll have said, a steeper decline than that pegged by property analysts in the emirate.Some 38 percent of respondents said the Gulf’s worst performing real estate market would see a 20 percent slide in prices, a deeper rout than the 15 percent forecast by analysts this month. A further 37 percent of the 350 readers polled said residential prices were still in decline, but put the expected drop at 15 percent, with 11 percent believe house prices had hit bottom. Fourteen percent of respondents, however, said house prices had flatlined and the Dubai market would show signs of recovery by the year-end. Rents and prices in Dubai's once-booming property market have been in a free-fall over the last few years, pummelled by the global financial crisis and the emirate’s own debt crisis. Residential property prices in Dubai, which boasts of the world's tallest building and man-made islands in the shape of palms, have fallen some 60 percent from their peak. House prices in the city are expected to be further squeezed by a glut in supply, with Jones Lang LaSalle reporting a further 18,000 new homes will hit Dubai's saturated market by the year-end. State-backed developer Nakheel, one of the biggest casualties of the real estate crash, said last week it planned to handover 7,982 homes in Dubai by December 2012. “Average sales rates are likely to be down around ten to fifteen percent, but this will vary by individual property,” said Matthew Green, head of research at consultancy CB Richard Ellis. Lower-tier properties are likely to be worst hit by an estimated 10 to 15 percent fall in rents, said Ian Albert, regional director Middle East at Colliers International. Dubai said in June it had cancelled 217 property projects as of May 31, following a review of more than 450 projects. The emirate said it expected a further 237 developments to be completed “in due course”. Dahi Khalfan Tamim, Dubai’s chief of police and head of the country’s budget committee, earlier this month urged Dubai to slow down the pace of its real estate development. “Dubai shouldn’t expand its real-estate sector as it did in the past,” Khalfan said. ‘‘We should slow activity, and there should be a ceiling.’’ From / Arabian Business news