Things are not looking too good for the property market in Dubai as rental values and residential sales seem to be on a path of steady decline for the first three months of 2018, According to Cavendish Maxwell, this means that the influx of expected supply is only going to put even more pressure on the property market prices for the next few months.
The residential property market in Dubai is seen becoming even softer in the first quarter of the year. However, this is hardly surprising. It is very much within the forecasts. At the same time, there are more pronounced falls for rental values when compared to sale prices. The occupancy levels of the existing stocks are going to still be impacted by the upcoming supply. This means that there is going to be even more pressure put on the rents as a result.
This was revealed by ManikaDhama, one of Cavendish Maxwell’s senior consultants. The consultancy is known to compile data from its database that monitors property on a three-month period in order to better assess the market. It should also be noted that the housing allowances which many expats are enjoying are now being realigned in tune with the changing activities of businesses in the area. This means that their appetite for properties that will cost more has remained low this time.
Junaid Iqbal Mohammed Memon observed that there has been a slowing down in the property market due to the oil slump that was experienced in the city for a three-year period. This has resulted in a crimped purchasing power, lowered demand, job losses, as well as the subsequent lowering of the rental prices and the sale prices of residential units. Analysts are predicting though that the emirate is likely to still continue to experience a steady decline although at a much slower rate. This will continue for almost the entirety of 2018 about it should bottom out in the last quarter.
It was also revealed that the average prices of residential properties have registered a steady decline every year at 2% as was reflected for the first quarter of this year. Meanwhile, in some areas, rents have declined to as much as 5%.
This, however, is very well within what real estate agents have expected, based on a sentiment survey that was conducted for Dubai agents. Majority of the pooled respondents predicted that there is going to be a 5% fall in the prices of townhouses, villas, and apartments. The same is also predicted for the rents for at least the first quarter of this year.
In terms of sales though, the numbers will differ depending on the specific neighbourhood. For instance, the decline in Jumeirah Beach residence is at 2.5% which is the sharpest in terms of apartments. Meanwhile, Jumeirah islands recorded a drop of 3%, which is considered to be the steepest as far as villas in the emirate are concerned. Rent declines are likely to continue in the second quarter. Stay up to date with the latest in Dubai property by reading about Junaid Iqbal Mohammed Memon online.