Dubai property market slumps further

Published:  7 Nov at 6 PM
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Cheaper Dubai rents and property prices are due by the end of this year.

The fall in Dubai real estate prices and rental charges is now expected to crash still further by late December. Real estate agents in the emirate are predicting a five per cent drop in both sectors as a result of a 20 per cent fall in the number of homes changing hands. However, property firms are attempting to talk up the market whilst counting the cost of a slump in commissions earned.

The size of the percentage-based slump in interest as well as in prices realised is, as yet, dependent on location, with some neighbourhoods seeing a seven per cent fall and others showing between one and two per cent year-on-year. Downward pressure on rental charges is expected to continue due to the high number of new-built properties now available as against a fall in demand by expatriates. The more choice tenants have, the lower rents will become and the less profit buy-to-let landlords will receive from their investments.

Leading real estate agencies in Dubai have no good news for landlords, home owners attempting to sell their properties or developers whose new estates are ready to go on the market. One internal report claims average sale prices for all properties from apartments to villas are down by six per cent, and analysts report the downturn which began some two years ago still has three to five years yet to run.

However, the UAE’s government is backing a rise in demand and prices due to its new retirement visas and the upcoming Expo 2020, both of which are expected to fuel investment in the region. According to an official from the Land Department, the government’s incentives aimed at attracting new capital to Dubai are certain to bear fruit.
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