MARKETSCAN
Property rates drop in Dubai
UBS raised its price targets on shares of several property companies in the United Arab Emirates on valuation, but forecast a further 20 per cent to 30 per cent drop in Dubai house prices from current levels.
Stock valuations of UAE property companies have likely troughed following the downturn in the real estate sector in the region over the past 12 months, UBS wrote in a note to clients.
“We have witnessed a strong return of risk appetite, not just for global equities in general this year but specifically for Middle East and North Africa (MENA)-based property stocks after the sharp sell-off in 2008,” the brokerage said.
The brokerage, however, noted that despite a decline of more than 50 per cent in property prices in Dubai, they could still drop further from current levels.
Continued population outflows from the region and new units still coming on-stream could leave the residential property market with more than 25 per cent oversupply by the end of 2010, UBS said. Earnings of property companies in the UAE are likely to remain choppy and demand drivers soft in 2010, the brokerage added. - Reuters
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