Dubai house prices may slump as much as 70% from their peak late last year as demand drops and banks fail to resume mortgage lending, prompting mergers, UBS said.
“We are still in relatively early stages of the property down-cycle in United Arab Emirates,” Saud Masud, a Dubai-based analyst at the Swiss bank, wrote in a report to clients dated yesterday. “We believe risk-reward profiles are not yet compelling for investors to consider market re-entry, hence continued price declines are expected.”
Economic growth in Dubai slumped after the worst financial crisis since the 1930s hurt its property, financial services and tourism industries. The economy may contract 2% to 4% this year, Standard & Poor’s Ratings Services said in a report last month.
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