The real estate markets in Dubai and Abu Dhabi are expected to perform badly during 2010, according to local property consultant Landmark Advisory.
The consultant says it expects sale prices for apartments in Dubai to continue to fall over the course of the year. During the next 18 months it says prices could decrease by up to 20 per cent. It expects the prices of villas to remain largely stable, but the increased supply of villas at inland locations will have a negative impact on prices in those areas.
Rents in Dubai will also continue to fall in 2010 as more villas and apartments come onto the market at a time of weak demand. Landmark Advisory says demand fell by 5.4 per cent during 2009.
In Abu Dhabi it expects sale prices to remain stable during 2010, although it expects rents to continue to fall as more supply is delivered, and people working in Abu Dhabi choose to commute from Dubai.
It says there was a market-wide rental correction in Abu Dhabi during the fourth quarter of 2009. Rents for high-end units fell by 15 per cent.