New research shows that average residential property prices in Dubai have fallen considerably in the first three months of this year.
According to new data released by Dubai-based property consultancy JLL, apartment and house prices fell by between 10 and 11 per cent in the first quarter of 2016, year-on-year. Rents dropped by 5 per cent over the same period.
While a fall in oil prices is reckoned to be one driver behind the property price declines, tougher borrowing regulations and higher transaction fees have seen fewer buyers entering – particularly from overseas – is having a negative impact on price growth.
“The continued period of low oil prices is tightening regional liquidity which is also affecting the real estate market,” Craig Plumb, JLL MENA Head of Research, said in the report.
“Whilst the short- to medium-term outlook for the Dubai real estate market is less encouraging, we remain positive on the long-term outlook due to future growth and demand drivers like the Expo 2020 and other mega infrastructure developments,” he added.
Having crashed spectacularly at the end of the noughties, Dubai’s property market recovered well at the start of this decade, and prices in the emirate had been booming in the three years prior to 2014. Property experts in Dubai, however, believe that the latest price falls, which have been in evidence for the last 18 months, are not as severe as those seen a few years earlier, and the JLL report states that prices are close to “bottoming out.”
Article by David Fuller