- 3 per cent price decline in apartments prices
- Apartment volumes up 8 per cent
- Dubai market set for subdued period
Dubais real estate market continues to face a period of volatility before stabilisation in 2018, states a mid-quarter research report published on 3 March by local real estate firm Phidar Advisory.
The report highlights a dip in Dubais residential sale prices with apartment values dropping by 3.7 per cent and villas by 3 per cent in the first six weeks of the year.
In February this year, MEED reported that Dubais real estate market was set to face a difficult 2015. A combination of low oil prices, a strengthening dollar and supply and demand economics are all expected to play a role in the slowdown of the market over the next 12 months.
A stronger dollar combined with a weaker euro and rouble has meant capital flow is more limited.
In addition to this, Russian investors have dramatically slowed down their activity as their currency has devalued in recent months. Compounding this is the fact that the dirham is pegged to the dollar, meaning any investment in the UAE has become more expensive.
The market is difficult to predict with several factors playing a role, but it seems the previously predicted dip in property prices is starting to take shape in the early months of the year.
Cloudy outlook for Dubai property sector
Internal and external factors play a role in the slowdown of Dubais real estate market
Dubais real estate sector has become synonymous with volatility, therefore, any movement in the market is closely scrutinised as analysts and investors alike continue to fear a repeat of the 2008-09 crash.
Dubai is a sensitive market driven by perception, and with falling oil prices, a stronger dollar and the weakening of the euro and rouble, the market is beginning to suffer amid a lack of previously enjoyed capital inflow from abroad. Internally, the market has also been affected by tighter mortgage laws, increased registration fees and growing concerns surrounding supply and demand fundamentals. Read more.