A widely circulated report by a UBS analyst has dashed talk of “bottoming out” and a “slow recovery” in Dubai. Prices could drop by another 30 percent in the next two years and it might be a decade before prices return to the glory days of 2008, according to the much-quoted report by UBS analyst Saud Masud.
|
|
He describes the market as "fragile." Vacancy rates in residential units may rise to 25 to 30 percent, as more projects open and the population declines, UBS predicts. “As we move past the summer season and potential for expat exits picks up, there is a likelihood that rents begin to drop faster than home prices thereby compressing rental yields," the report says.
Masud predicts a “market trough” in 2011, which coverage in The National calls "one of the most bearish assessments" of the market. UBS' view, for example, is a sharp contrast to a recent report from Deutsche Bank, which suggested Dubai may be bottoming out, or at least near the bottom.
But the UBS note strikes the same chords as a recent analysis by Nomura Holdings, which also noted the looming convergence of a drop in population and a glut of units.
