DUBAI: Dubai’s property market is likely to face further price falls and increased concerns over the availabilty of finance after the emirate said it would delay debt payment issued by two of its flagship firms, analysts said.
Dubai rocked the financial world on Nov 25 when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree to a standsill on billions of dollars of debt as a first-step to restructuring.
‘The news plays on investor psyche and house prices may slide a further 20-30 per cent earlier than our existing view of second half of 2011,’ said Saud Masud, UBS’ head of research and senior real estate analyst, Middle East and North Africa.
‘There may likely be further job cuts as a result of any potential restructuring, and that could directly impact population outflows and result in housing oversupply.’ State-run Dubai World had $59 billi
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