The real estate market in Dubai shows no sign of recovery. The recent sales transactions including the property values are still decreasing.
Realty Biz News says that home prices in Dubai will continue to decline until the end of this 2015 and even through 2016. The recent statistics reveal that prices of apartments for the 3rd quarter fell 3% more as compared to the previous quarter. "The consultancy JLL is anticipating that the next growth cycle may not begin until the years immediately before Expo 2020."
It has also been noted that for the past 12 months, which ended in September, the property value has decrease by 11%. This means that real estate properties in Dubai are pretty much of a buyer's market. Of course, this is not good news for tenants because the rents have not decreased, "the decline in rents for the third quarter of this year was limited to just 1% compared to the previous quarter."
Despite the decline of home prices, people in Dubai are not buying real estate property still. In fact, the sales transactions reported in the 2nd quarter this year is "4,000 while values are Dh5.9 billion which is the lowest since the middle of 2011." The Dubai Land Department record shows that the sales volumes had reached its peak in 2013 with a 33,800 transactions. These transactions had decreased in 2014 by 30%, showing only to 23,800 transactions. The property value has followed the same trend with the sales transactions.
Gulf News says prospective home buyers have keep on biding their time. Buyers are waiting for the time wherein they can the best bargain. This is the reason why nobody is rushing in acquiring properties despite the home prices in Dubai are continuously dropping.
On a different note, despite the transaction levels are way down, the conversion rates are not affected and continue to be at its healthy rate.
The stability of Dubai real estate market may not be too soon, but it is also noted that "average selling price has not fallen significantly," which can be interpreted as there are "relatively few distressed sales occurring." This is also supported by the figures that the average sales price during the 2nd quarter of 2015 was around Dh1.463 million. Thus, when compared to the 2nd quarter of 2013, the current report is still way ahead from Q2-2013.
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