Dubai Property Back in Demand

17.07.16

The residential real estate market in Dubai maintained its stability in the year to April 2016, despite prices falling, according to the latest analysis report on the emirate.

Despite a 9% year on year drop across the mainstream market, the General REIDIN sale price index remained relatively flat on a monthly basis, with no noticeable changes in the performance of both apartments and villas, says the report.

Dubai’s prime market continued to outperform the market average with the prime price index down 5% in the 12 months to April 2016 compared to the previous 12 month period.

Prices in the prime segment increased 2% on a quarterly basis between the fourth quarter of 2015 and the first quarter of 2016. The performance of prime apartments outweighed that of villas, with the index pointing to a 2% quarterly increase over the same period. In turn, prime villas recorded no significant price change.

A number of factors have supported this regulation in prices and are set to support the return of confidence to the market including the government commitment to infrastructure spending.

It points out that while it is too soon to estimate the impact of the Expo 2020 on the residential sector, continued government spending on infrastructure projects geared towards the event such as Route Metro 2020 and Dubai Parks & Resorts will promote confidence in the market and is expected to draw further inward capital.

There is also likely to be some control of supply as there is a general consensus among developers of the need to phase out residential projects in line with demand and strong liquidity with the residential real estate market in Dubai continuing to attract capital from strong liquid markets such as Saudi Arabia and India, two of the traditionally top buyers of real estate in Dubai.

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