“In our view expat-led population outflows in Dubai and flattish trends in Abu Dhabi will pressure house prices in the foreseeable future,” the bank said in a research note.
A population decline of 8 percent in 2009 and 2 percent in 2010 may be conservative and accounting for potential payment defaults, would exacerbate Dubai’s housing issues, it said. The bank expected residential oversupply to reach 27 percent by the end of 2010 and remained cautious on the timing of property handovers.
Dubai’s once-booming real estate sector has been hit hard in recent months as property prices fall, developers slow or halt projects and jobs are cut.
UBS cut Emaar Properties price target to 2.30 dirhams from Dh3.50, Union Properties to Dh0.70 from Dh1.25 and Aldar Properties to 5 dirhams from 7.50 dirhams, it said.
