Dubai property prices are forecast to continue falling in the second half of 2016, but at a slower rate than earlier in the year, according to a report by Deloitte.
Residential sale price declines will slow “as value and affordability returns to the market”, the audit firm and consultancy said in its “Deloitte Real Estate Predictions 2016 – H1 Review.”
This reflects a “transition to a more mature market, as well as an increase in more affordable stock and discounting in emerging locations”, Deloitte said.
“Prices for Palm Jumeirah apartments declined by 3.8% between January 2016 and June 2016, while prices for Downtown apartments declined by 1.8% over the same period. Year on year data indicates that overall, residential sales prices in Dubai declined by 3.8% between June 2015 and June 2016.”
In Dubai’s hospitality sector, Deloitte predicts strong levels of demand for serviced apartments, driven by increasing visitor numbers from key source markets, growing visitor demand for longer average lengths of stay and better value accommodation.
“Average hotel occupancy in Dubai in the first six months of 2016 was 77%, slightly ahead of our forecasts,” said Robin Williamson, Managing Director, Deloitte Corporate Finance Limited, Middle East.
“Looking at the data in more detail, it is clear that hotel operators in Dubai continued to discount Average Daily Rates in an effort to maintain occupancy, with a decline in Average Daily Rates noted in the first six months 2016. We anticipate that this trend is set to continue in the second half of 2016,” he added.