Published On: Tue, Oct 17th, 2017

Dubai flooded with realty stocks, rates likely to go down by 35%

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By Accommodation Times Bureau

JLL Mena in its Dubai Real Estate Market Overview – Q2 2017 have said that The residential sector continues to see additional units enter the market taking the total stock to just over 480,000 units. While sale prices showed little change for both villas and apartments. Q-o-Q, average rentals declined compared to the same period last year.

Huge stock and  cumulative addition to residential apartments made the property prices sluggish.  In its Dubai Real Estate Predictions 2017, Forbes Middle East published an analysis on its website dated 13th March 2017 which said “…Transactions, sale prices and rents for residential apartments and villas in Dubai all continued to decline through 2016. Average sale prices across Dubai declined by 6.1% over the period Q3 2015 to Q3 2016. We predict that residential sale prices will continue to decline in Dubai in 2017. This is likely to be driven by low oil prices denting investor confidence in addition to a strong local currency reducing the purchasing power of key international source markets such as India and the U.K. We anticipate that consolidation in oil and gas and related companies, sluggish wage growth in the wider economy and inflation are set to drive down residential rents in 2017 in Dubai. Based on consultation with key developers active in Dubai, we anticipate that Dubai’s residential supply will increase by approximately 2.5% in 2017, representing an addition of around 10,000 new units.”

Yet another research house Deloitte in its Middle East Real Estate Predictions: Dubai 2017 said “Transactions, sales prices and rents for residential apartments and villas in Dubai have all continued to decline through 2016. Average sales prices across all residential sub markets declined by 6.1% over the period Q3 2015 to Q3 2016.” The report further ads “…We predict that residential sales prices will continue to decline in Dubai in 2017.”

In its report Arabian Business under its headline “Dubai’s real estate market downturn ‘nearing its end’ wrote “…The downturn in Dubai’s residential market, which has seen prices fall over a number of months, is nearing its end, according to a new report.”

In its report, Cityscape said that total about 34% of the total sales transactions, totaling to transactions, were concentrated in three areas: JVC, Al Furjan and Business Bay. On page 16, the report said “A boost in the supply in the mid-income housing communities have caused an upwards movement in the transactions activities in the affordable housing communities. Developers are getting aggressive with their off plan units pricing to sell their off-plan inventory.”

 

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