World Property Journal released a report that according to Cluttons, home price growth in Dubai is continually decreasing, and is bottoming out in the market. This trend is likely to pursue up until the last quarter of 2016.
As per Cluttons' Dubai 2015 to 1026 winter Residential Property Market Outlook, values for apartments and villas decreased during Q3. This drop marks the fifth consecutive quarter of price decrease.
Though prices are a bit shaky, these would however be the same infrastructure investments that are being planned out by the time Expo 2020 would hit, which would boost job creation. This would also increase the rate of new house holds that would be created.
Housing prices also declined in the region 3% to 5%. This decrease is expected over the next 12 months caused by global growth and supply levels that are slowly increasing.
Dubai residential market highlights include:
- -3.5% annual rate of change in values at the end of Q3 2015
- Rents stabilise with average rents across freehold areas down 3.2%
- Transactions creep upwards
- Affordability challenges remain
- Luxury segment officers good value-for-money
CEO of Cluttons Middle East, Steven Morgan, stated that expansions are expected over the next three years. He then added that 48% of the units that are to be delivered will be villas.
"We expect 7,400 units to complete in 2016, 10,300 in 2017 and a further 13,600 in 2018, with the new schemes launched during the past quarter, helping to even out the balance between villas and apartments. Over the next three years, 48% of the units delivered will be villas. We've seen the popularity of off-plan property sales persist, partly fuelled by the fact that off-plan residential property prices are often 20% to 30% lower than completed secondary stock, which in essence might allow buyers to bypass some of the stringent lending criteria and also possibly avoid the need for a mortgage altogether."
