Dubai property prices ‘to stabilise in 2016’
Prices set to start rising after declines this year, real-estate firm Core Savills forecasts
Dubai property prices, which have been declining since the market peaked in late 2014, are set to stabilise in 2016 before growing again the year after, Core Savills predicts.
Recent data suggests that Dubai’s real-estate market hit a high in October 2014 at levels above those of August 2008, according to a report by the real-estate firm.
Residential-sales prices have since fallen steadily by a compounded average of 1.2% per month for apartments and 0.7% for villas, the report said.
Reasons cited in the report for softening prices over the past few months include external political and economic factors such as regional instability, the Chinese crackdown on capital outflows, sanctions on Russia, the falling rouble, the appreciating US dollar and euro zone issues.
David Godchaux, CEO of Core Savills, said the outlook is positive for Dubai in 2016, with the market expected to start growing again in the years immediately preceding the Expo 2020.
“We are confident that the residential sales market will return to growth during 2016 after a period of healthy price decline. An adjustment, however, does not mean crisis – on the contrary, a healthy softening is what Dubai really needs to give renewed confidence to long term investors that the real estate market has matured and gained more depth and liquidity.”
Meanwhile, the office space sector is expected to remain stable, with a steady growth forecast and greater choice for prospective tenants. Downtown Dubai and DIFC were found to retain their position as sought-after locations for offices, with many foreign companies willing to pay a premium for space there, resulting in low vacancy rates.
