Dubai property market in for a tough year

A new report predicts that Dubai’s property market is set to face a challenging year in 2016, although there is hope that prices could once again pick up in 2017.

Property price figures released by a range of Dubai-based property agents show that average sales prices for apartments and villas in the emirate declined in the region of 11 to 13 per cent between 2014 and 2015.

And while real estate consultancy KMPG is forecasting yet another tough year for property prices in Dubai, the company do not believe that the falls will be as great as those seen in 2009, when property prices fell by around a half.

“Although 2016 could be challenging in the short term, with effective regulations in place and the infrastructure investment that is committed as part of Expo 2020, we should see an upturn in the real estate industry in 2017,” said Sidharth Mehta, partner and head of building, construction and real estate at KPMG Lower Gulf.

“When preparation for Expo 2020 picks up, we expect to see a significant amount of job creation and an increase in demand for residential real estate,” he added.

According to the KMPG report, the main reason property prices in the emirate are currently falling is due to the low global price of oil depressing the Dubai housing market. The low oil prices, the report notes, restricts the ability of some potential purchasers to buy.