The Dubai property market ended 2015 with falling rates which real estate agents are expecting to further decrease this year. A majority of respondents to the Emirates NBD Real Estate Tracker reported significant declines in buyer inquiries and transaction numbers in the last quarter of 2015.
According to real estate agents, weaker investor sentiment and muted underlying market conditions are the two major causes of the decline.
In the survey which began in April 2015, 47 percent of real estate agents in Dubai said they are expecting a fall in property values over the course of 2016. Only 32 percent predict an increase.
"The survey is consistent with recent data on residential sales and letting prices in Dubai, which show prices continuing to ease. However, the momentum of price decline has moderated in December. The strong US dollar and low oil prices are likely to remain headwinds for the real estate sector in 2016," said Khatija Haque, head of MENA Research at Emirates NBC.
Real estate agents who responded to the survey noted that in the next 12 months, the market conditions in Dubai would favor buyers over sellers. New developments will continue to rise increasing supply. However, the uncertain economic outlook is predicted to hamper investor demand. They also observed weaker trends on the side of sellers and land lords. The survey showed that rental enquiries fell for the first time since April 2015.
In the case of apartment and villas, survey respondents revealed that their values had a slight decrease at the end of 2015. The number of transactions also declined during December. Although the demand for apartments remained stable, there was a notable drop in the volume of villa rentals.
Moreover, the survey revealed that households in Dubai experienced a slight increase in rent prices. Only people living in apartments noted a significant rise in their rental price.
