DUBAI: Dubai property shares plunged and its biggest private developer slashed jobs this week as the global financial crisis tightened its grip on the tiny emirate, until now synonymous with the Gulf Arab real estate boom. Dubai’s glittering skyline and luxury tourism sector have lured investors in droves over the past five years. But property prices have begun to fall, according to brokers and banks, in one of the clearest signs to date that the bubble has burst. A real estate crash in Dubai would call into question the futures of millions of immigrant workers, many from India and Pakistan, and whether energy exporter Abu Dhabi would run to the rescue of its high-flying but poorer neighbour.”
Villas that were very hot before the crisis have fallen. The buyers were chasing the sellers but now it’s the other way round,” said Quaid Abbas, property consultant at Engel & Volkers.
“Small real estate companies are going to close down.” Secondary prices in Dubai and Abu Dhabi fell 4 to 5 per cent, with Dubai’s advertised villa prices falling by 19 per cent month-on-month in October after several banks tightened lending conditions in August and September, HSBC said.
Apartments in the Dubai International Financial Centre, the nexus of the banking and investment sector, fell as much as 30 per cent, it said. Rehab Gouda, senior sales agent at Al Jabal Real Estate, said that property prices had fallen 30-35 per cent in Dubai since September. A three-bedroom villa in the unbuilt Jumeirah Park project, a sought-after area of the seaside emirate, which was worth around 4.8 million dirhams ($1.3 million) in August, is now valued at roughly 3.8 million dirhams, she said.
“The market is going through a tough time,” said Sana Kapadia, associate equity research at EFG-Hermes in Dubai.
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