Property prices are expected to fall further as the global economic slowdown continues to hit the sector, according to analysts.
Compared with figures last July when the market peaked, the total fall in property prices by the end of this year is predicted to be up to 60 per cent in Dubai and about 20 per cent in Abu Dhabi, according to Roy Cherry, a research analyst at Shuaa Capital.
"2009 will be a dark year for the real estate sector," said Mr Cherry. "We expect the first half of 2009 to potentially realise further drops, with stronger declines in Dubai than in Abu Dhabi."
The first half of the year will be the most challenging in Dubai, with asset values reaching new 24-month lows, increased defaults on off-plan property and growing issues with payments, according to a note on the outlook of 2009 by Shuaa Capital's research team.
Dubai's property prices fell up to 40 per cent last year as high-profile corruption scandals in the sector picked up pace during the summer months. Residential property up until July last year had reached all-time highs. Off-plan primary market properties in Downtown Burj Dubai and DIFC were selling for Dh45,000 (US$12,249) to Dh55,000 per square metre, an increase of about 100 per cent in less than a year. However, as hot money left the market and banks began to restrict lending to developers and contractors in August, the sector began to struggle, analysts say.
"Most of Dubai's gain [in real estate growth from 2007 to 2008] has evaporated due to the recent crisis that we've seen," said Mr Cherry.
Shuaa analysts warn that Abu Dhabi's property sector, while more resilient than Dubai's, is not immune.
"It's more of a sentiment-based correction that we're seeing in Abu Dhabi; fundamentals say the market is strong, yet there is a negative reaction due to what's happening in Dubai and the severity of it," said Mr Cherry.
Abu Dhabi's population is likely to grow but at a slower pace than last year, meaning that short-term demand growth will also be suppressed, according to Shuaa's research note. Fundamentals remain strong, however, with the residential property market witnessing extreme shortage and rising rents. Residential property prices had been rising until last October. In the 12 months from Oct 2007 to Sep 2008, Abu Dhabi prices of apartments increased by nearly 90 per cent, according to Colliers.
Abu Dhabi occupancy rates are expected to remain close to full levels and rents to stay on the rise, according to Shuaa. In the past year, Abu Dhabi rents are estimated to have risen by 65 per cent in spite of a 5 per cent cap on rent renewals.
Although the Abu Dhabi market is expected to see fewer transaction activities and perhaps a further drop in asset values in the first two quarters of this year, growth is expected in the following quarters.
"Fourth-quarter results will give some indication of where we're going, and the second half of 2009 will give us a better ability to assess how the crisis has impacted the sector," said Mr Cherry.
For the moment, Mr Cherry expects further corrections in the property sector as long as uncertainty remains high, economic data is limited, project funding remains an issue and job security levels remain low.
While relatively optimistic about transactions in the second half of this year, he does not expect a sudden rebound. "The days and liquidity of 2008 are long gone and won't be seen for some time to come."
shamdan@thenational.ae
ngillet@thenational.ae
Last 10 winners of African Footballer of the Year
2006: Didier Drogba (Chelsea and Ivory Coast)
2007: Frederic Kanoute (Sevilla and Mali)
2008: Emmanuel Adebayor (Arsenal and Togo)
2009: Didier Drogba (Chelsea and Ivory Coast)
2010: Samuel Eto’o (Inter Milan and Cameroon)
2011: Yaya Toure (Manchester City and Ivory Coast)
2012: Yaya Toure (Manchester City and Ivory Coast)
2013: Yaya Toure (Manchester City and Ivory Coast)
2014: Yaya Toure (Manchester City and Ivory Coast)
2015: Pierre-Emerick Aubameyang (Borussia Dortmund and Gabon)
2016: Riyad Mahrez (Leicester City and Algeria)
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Poland Statement
All people fleeing from Ukraine before the armed conflict are allowed to enter Poland. Our country shelters every person whose life is in danger - regardless of their nationality.
The dominant group of refugees in Poland are citizens of Ukraine, but among the people checked by the Border Guard are also citizens of the USA, Nigeria, India, Georgia and other countries.
All persons admitted to Poland are verified by the Border Guard. In relation to those who are in doubt, e.g. do not have documents, Border Guard officers apply appropriate checking procedures.
No person who has received refuge in Poland will be sent back to a country torn by war.
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
UAE currency: the story behind the money in your pockets
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
RESULT
Arsenal 0 Chelsea 3
Chelsea: Willian (40'), Batshuayi (42', 49')
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
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APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
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What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
The specs: Fenyr SuperSport
Price, base: Dh5.1 million
Engine: 3.8-litre twin-turbo flat-six
Transmission: Seven-speed automatic
Power: 800hp @ 7,100pm
Torque: 980Nm @ 4,000rpm
Fuel economy, combined: 13.5L / 100km
FIVE%20TRENDS%20THAT%20WILL%20SHAPE%20UAE%20BANKING
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Director: Romany Saad
Starring: Mirfat Amin, Boumi Fouad and Tariq Al Ibyari
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
How to volunteer
The UAE volunteers campaign can be reached at www.volunteers.ae , or by calling 800-VOLAE (80086523), or emailing info@volunteers.ae.
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
