- August 24, 2016
- Posted by: admin
- Category: Market Update
Property prices in the glass and steel city of Dubai have fallen for the sixth quarter in a row. Home values dropped by 12% in the past year with prestige and luxury homes hit by the worst price declines. Prices were also down 2% in June compared to the first three months of the year, according to property specialists CBRE.
Rents were also down by close to 2% in the year to the end of June 2016. The firm blames the continuing property price slowdown on the strengthening US dollar and Brexit economic uncertainty unsettling the confidence of buyers.
Talking up the market
“Amidst ongoing economic uncertainties, redundancies and lower accommodation budgets we can expect to see further softening of demand levels and sales rates in the short-term, especially for higher-end and larger units,” said Mat Green, head of Research and Consulting UAE for the firm.
Several local property consultants have tried to talk up the market in recent months, but have failed to reverse the falling price trend. Dubai may see an oversupply of housing as CBRE reckons close to 48,000 homes should be released by developers by the end of 2018.
“This is broadly comparable to five-year average supply. Much of the upcoming housing is expected to be delivered in secondary and tertiary locations such as Dubailand, Jumeirah Village, Business Bay and Dubai Silicon Oasis,” said Green.
Price falls bottom out
In the Dubai Property Overview for Q2 2016, CBRE argues the Dubai housing market is splitting with high-end properties suffering the greatest price falls. “We expect sales to drop by up to 5% by the end of 2016,” says the report.
A separate survey by UAE classified advertising website Dubizzle also looking at Q2 property market statistics says house prices have bottomed out with no real decreases in the quarter.
The analysis also said rents saw up to 2% declines for one and two bedroom apartments.
“Rent decreases are bottoming out and although sales are still suffering, the price cycle is almost at a close and we have seen no shifts in pricing since the start of the year,” said Ann Boothello, a senior marketing manager for the company.