The Swiss banking giant UBS has downgraded the real estate sector in the United Arab Emirates (UAE), the Wall Street Journal reports.
The main drivers for the downgrade are seen as the massive oversupply of properties, expected price falls of up to 70% and prospects of widespread defaults.
Property prices in Dubai have nosedived since September 2008, when the effects of the U.S.-triggered world financial crisis and falling crude prices caught up with the property boom in Persian Gulf sheikhdoms.
The UBS research note, released on Tuesday, goes on to say: ""We believe the recent run up in equities with positive global market sentiment, U.A.E. government bailout as a backdrop is unsustainable,… We don't yet see fundamentals improving, hence we view overall systematic risk as mispriced.""
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