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Dubai property prices fall for sixth quarter in a row

Residential property prices in Dubai fell for the sixth consecutive quarter during the second quarter of the year, as the recent slowdown witnessed in the market continued, the latest figures from CBRE reveal.

According to a report from the real estate consultancy, the average sales rate dropped 2% quarter-on-quarter and 12% year-on-year, with the most significant fall witnessed in the upper segment of the market.

“Prices within the mid-market segment have proven to be far more resilient to this downward rate trend, reflecting the current demand for affordable accommodation in freehold communities,” the report said.

Although sales have held up relatively well, rental values in the mid-market segment of the market in areas like Al Barsha, Oud Metha and Bur Dubai have fallen, reflecting the higher availability of homes on the market.

The devaluation of major currencies, including the pound, against the US dollar, spurred by global economic uncertainty, has had an adverse impact on investor sentiment in the emirate’s property market, the report said.

“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,” it added.

Property sales rates are predicted to fall further by an additional 3-5% in the coming quarters although some locations may vary.

Mat Green, head of Research and Consulting UAE at CBRE Middle East, commented: “It is estimated that around 48,000 new residential units (apartments and villas) could enter the Dubai market during the period 2016 to 2018, provided that construction delays are at a minimal.

“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.”

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