Grim outlook for Dubai housing market

       House jprices in Dubai, which fell the most during the global economic crisis, will suffer another "meaningful" slump in about three months because of increased supply and restrictions on mortgages,says an analyst at Zurich, Switzerland-based bank UBS.
       Prices wil drop an additioal 33 per cent to 6,458 dirhams (Bt59,400) per square metre, said UBS's analyst in Dubai, Saud Masud. Prices sank 47 per cent in the second quarter from a year earlier, real-estate firm Knight Frank said earlier this month.
       Dubai landlords have created "a temporary respite" int eh market by keeping apartments empty rather than adding to a glut of homes available for rent, Landmark Advisory said last month. Starting in the second half of 2008, the sheikhdm went from being the best performer out of 46 markets monitored in the Knight Frank global house-price index to the worst. A construction boom had creted thousands of homes just as demand began to evaporate.
       "[People]feel the market is coming back and they are trying to hold off for a bit," Masud said. "But that is not going to last because when more inventory hits the market and some one's apartment sits vacant for six to nine months, they are going to cave in, and that's when we'll see the repricing of assets."
       Global real-estate firm Jones Lang LaSalle last month said there were "signs of stabilisation" in Dubai's property market, with the decline in home prices slowing in the second quarter from the previous three months. However, the number of transactions fell 58 per cent during the quarter from a year earlier, it said.
       The market is currently in a "numbphase," and optimism is based on "few transactions," Masud said.
       Prices wil rech a bottom in 12-18 months. "[Next year] is going to be tough, and I would be shocked if we started talking about a recovery in 2010," Masud said. "Issuesof excess inventory,litigation, financing and payment delays are still unrfesolved and clogging up the pipeline."