This year may be a challenging one for Dubai real estate but despite headwinds, the market remains resilient and opportunities still exist, according to Trade Arabia, based on Deloitte Corporate Finance's second annual Real Estate Predictions Report for Dubai, an entity that is regulated by the Dubai Financial Services Authority.
Trade Arabia adds that the report has an economic overwiew of the city's residential, hospitality, office and retail markets last year and as well the laters trends the market has, including what is to be expected this year.
Robin Williamson, managing director of Deloitte Corporate Finance says, "Over the past 13 years Dubai has experienced development on a scale and to a standard like no other real estate market globally. Along with other regional and international markets, it has suffered the effects of the global financial crisis."
On the residential market, the forecast is that about 40,000 units will be done this year, however, it seems that the more realistic expectation would be about 10,000 units based from consultations made with key developers. A 10 percent decline in prices was recorded last year and it seems the same can be expected this year.
When it comes to the hospitality sector, the expectation would be around 70 percent to 75 percent compared to last year's 77.5 percent.
Williamson added, "Serviced apartments are likely to be an area of focus in 2016, driven by key source market trends, growing visitor demand for longer average lengths of stay and better value accommodation."
Meanwhile, on the office sector, the rental growth is seen to be slow this year while retail would have a moderate sales growth due to strong a dollar and weakening demand from Russia, China and parts of Europe, the international source markets of Dubai.
Williamson concluded, "Despite the decline in average residential sales prices in Dubai during 2015, price growth over the last four years reflects a compound annual growth rate of 11.6 per cent, which outperforms other leading global cities such as London, Paris and Singapore."
