UAE consumer prices fall as housing costs cool

[LahoreEstate]

DUBAI: Consumer prices in the United Arab Emirates fell 2.7% between January and April, reflecting a drop in housing costs in a declining property market, the Gulf state’s first-ever monthly inflation data showed on Wednesday.

The consumer price index of the second-largest Arab economy stood at 113.07 points at the end of April compared with 116.18 points at the end of January, the Ministry of Economy said in a statement.

The decline was due mainly to a 5% drop in the housing index over the period to 113.01 points in April compared with 118.94 points in January.

“This gives us a good sense that for the year as a whole you could have deflation, and it is being driven by a sharp fall in rents,” said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.

The UAE has until now released inflation data only once a year, typically months after the year ends. Rising house prices were one of the drivers of inflation in the UAE in recent years and price rises peaking at a 20-year high of 12.3% in 2008, the ministry said.

Annual inflation in the UAE stood at 4.94% in the first four months compared with the year earlier, the ministry said, without giving a month-by-month annual breakdown.

Food and beverage costs rose an annual 4.84% while housing costs advanced 4.99%, it said.

Real estate prices are slumping in the UAE, particularly in the emirate of Dubai, where residential real estate prices fell an average 41% in the first three months of the year, according to data of property consultants Colliers.

Dubai rents have also fallen sharply. Landmark Advisory, a property consultancy, said last month rents fell as much as 50% in some areas in Dubai from peaks late last year. reuters

http://www.dailytimes.com.pk/default.asp...009_pg5_35