Dubai’s residential prices decline
According to international real estate consultant Cluttons, Dubai’s average residential property value is down 7.4% during the past twelve months, but rate of decline is expected to slow heading into 2017 before reaching a new base towards the end of next year.
Murray Strang, head of Cluttons Dubai said: “Although our view of 2017 indicates positive signs to reverse the market’s fortunes, we are closely monitoring the level of residential supply coming to the market. With 34,000 units announced this year, it’s clear that project announcements are continuing at an unrestrained pace, despite what could be perceived to be challenging trading conditions.
“If supply continues to increase in the next 12 to 18 months, as the global economy remains unstable, it is likely to cause the current stability and projected bottoming out of the real estate market to unravel, with further price falls likely to follow suit. Demand and supply are almost in-sync currently, but this delicate balance can quickly be upset by a supply surge.”
Faisal Durrani, head of research at Cluttons said: “The villa market has continued to soften during the third quarter with values receding by 2.6% following a contraction of 2.5% in Q2, and taking the annualized rate of change to -7.8%. However, this figure conceals the villa market’s varied performance during the third quarter, as average prices contracted mainly due to the weak performance of the luxury segment of the market.