Dubai's Real Estate Rebound Slow to Materialize

---

Dubai's sagging property market is still at least two years away from recovery, analysts predicted this week during Cityscape Global, the region's largest property convention.

"All sectors of the Dubai market remain in the downturn phase of the cycle, with the likelihood of continued falls in average prices and rentals over the rest of 2010," Jones Lang LaSalle said.

Another 9,000 residential units are expected to come on line in Dubai in the next year, according to the consultancy.

"Even if these are not completed and handed over in time, Dubai's residential market continues to be oversupplied and prices are not expected to recover before the second half of 2011, at the earliest," JLL said.

In addition to an abundance of space, "weak demand from foreign investors" will likely conspire to keep prices low, JLL said.

Chris Waight, associate director of Cluttons in Dubai, was more upbeat, but still predicted a two year gap before recovery.

"As long as the property supply doesn't surpass the demand too much, we should see a stabilization of Dubai's residential property prices within the next two to three years," Waight told Emirates 24/7.

The majority of buyers these days are end users, not investors, Waight said, echoing recent comments from other industry executives.

In its ninth year, Cityscape Global changed its name from Cityscape Dubai to reflect the growing international influence in the region. More than 30 percent of the exhibitors this year were from outside the U.A. E., including companies from Cyprus and Brazil.

Although the number of exhibitors was down from peak years, the conference opened in the wake of a round of positive news for Dubai's development industry, including the restructuring of Dubai World's $25 billion in debt and confirmation that Nakheel is restarting projects.

Developers are clearly pitching Dubai as a market open for business again, after a long dry spell. In a bond prospectus issued last month, the government acknowledged canceling almost half of the registered projects.

"For the Dubai developers, the key focus this year... is delivery and completion," Rohan Marwaha, Cityscape's managing director, told a reporter.

However, more complete projects translate to more supply, which is already outpacing demand. In total, analysts predict anywhere from 25,000 to 35,000 homes are expected to come online in the UAE in the next year, JLL said.

"In Dubai in particular, there is an imbalance with the relatively low market demand and the very large and growing number of real estate projects," Sam Chandan, the global chief economist at Real Capital Analytics, told the National.

Cityscape generated its usual array of headlines, reflecting the various perspectives on the state of the market. The list ranges from "UAE Back on Growth Path" and "Dubai's Residential Sector in Recovery Mode" to "Dubai Prices Seen to Fall Further This Year" and "Dubai Property Still Weak, But Hopes Emerge."

---