S&p predicts further property price falls in gulf region

Property prices and rents in the Gulf will continue to fall in the second half of 2011, according to the latest outlook report on the region from ratings agency Standard and Poor's.

The rating agency said property developers in oversupplied markets, such as the United Arab Emirates, are likely to continue to scale back development activities in favour of rental and management of existing property stocks.

As markets in the GCC region mature, S&P said it expected to see greater emphasis on urban regeneration with ‘a pronounced shift away from high end residential development toward affordable housing’, particularly in Saudi Arabia.

Despite property price falls of up to 60% in some markets, in the UAE, Qatar, and Bahrain for example, between late 2008 and 2010, we expect capital values and rents to continue their largely downward slide in 2011,’ said S&P credit analyst Tommy Trask.

Source: PropertyWire.com