Morgan Stanley says "UAE property prices have fallen off a cliff" in a recent report. That's a fairly dramatic headline to say the least. Report is dated 30 January 2009, and UAE stock prices have also fallen off a cliff this week, so to speak. Not that they were at any sort of height worthy of note at the end of last week. The news just continues to get grimmer and grimmer it seems. Now, can someone remind me what MS were saying about UAE stocks and property a year ago ? See full report download (14 pages, pdf)
In this report we summarize what we consider are the most important developments in the UAE property market, and shed some light on what to expect from Emaar’s 4Q08 numbers and likely operational performance over the next 2-3 years.
UAE property prices have fallen off a cliff
As we expected, property prices in the region have come down across the board since their peak in September 2008, albeit at a much faster rate due to the global financial crisis. According to our proprietary property price index, asking prices in Dubai have fallen by an average of 25% and 20% in Abu Dhabi since their peak in September 08 (see facing Exhibits). Moreover, anecdotal evidence suggests sharp falls in transaction volumes in 4Q due to deteriorating economic conditions, the disappearance of speculative buying and the lack of financing.
Signs of Dubai rental market weakening, but not yet Abu Dhabi:
Rental rates started to ease in Dubai in December 08, where we expect average rents have fallen by 7% on average since their peak last summer. This is explained by the growing supply of new properties coupled with decelerating demand and reduced affordability. Abu Dhabi seems more resilient so far, given its different demand/supply fundamentals.
Project delays and new launches halted:
Property developers have started to announce project delays in response to falling demand and deteriorating market conditions. According to Zawya, US$263 billion worth of projects in the UAE have been delayed/cancelled, with all the recently announced mega projects, including Meraas Jumeirah Gardens (US$98bn) and Nakheel’s Harbour project (US$38bn), put on hold.
Emaar 4Q08 results:
The market may have already factored in a sharp fall in the group’s 4Q08 numbers, but there are a number of pertinent questions that need to be answered by management, in our view. In particular, given the challenging operating environment, an update on its future strategy is particularly pressing, we think.
According to our proprietary property price index, asking prices in Dubai have fallen by an average of 25% and 20% in Abu Dhabi since their peak in September 08 (see facing Exhibits).
Or in other terms, prices have gone back to where they were this time last year. Shock. Horror.
In reality houses are clearing 50% lower than September, which is the same as... Mid 2007. Gasp.
actually prices have fallen lesser then expected no?
some ppl were predicting 80% fall in house prices this year.
but so far they have only fallen as much as other countries i think.
we might listen this voices soon from the sitting landlords outside there buildings(ulf dhm wahid shahar and we step forward then new voice khumsamiut dhm plz take) its just my view might be very pestimistic
Anyway in realistic:surrounded Burj dubai, burj town area:btw 1000 to 1100dhms per sq feet.
Greens:btw 800 to 900dhms
JLT:btw 800 to 900dhms
Business bay: btw 800 to 900dhms
International city:500 to 600dhms
spring two bed rooms villa 1.1 million,3 bed room 1.5 millions
lala _________________ its my opinion,money is your,s
i read an article on alaswaq.net stating that the rents in dubai will reach a lower level in summer ( after school time ), as many employees whom are being sacked are returing back to their home counties ,causing a huge supply in the market , not to mention the units which their owners are not able to sell or not willing to sell with the current rates .they will add too to the excess supply.
if you are watching the market you can clearly see how prices are declining and so are the rents. it seems what rises fast , falls faster.
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? See full report 
its just my view might be very pestimistic
