Property prices: Abu Dhabi to drop 20%; Dubai 10% by 2012

Residential property prices in Abu Dhabi are likely to drop by another 20 per cent, while Dubai will see a decline of 10 per cent by end-2012, says a new report.

“We forecast another drop of 10 per cent to take place through to the end of 2012 in Dubai and a 15-20 per cent decline in Abu Dhabi,” Global Investment House said in a new report.

Dubai residential selling prices have dropped almost 56 per cent from their peak in fourth quarter 2008 until first quarter 2011, while those of Abu Dhabi lost 45 per cent over the same period. The current vacancy rate in Dubai and Abu Dhabi stand at 30 per cent and three per cent, respectively. The capital, however, is subject to “significant” increase in the coming 2.5 years given the influx of 65,000 units in the residential market.