fbpx

UAE Prices Plummit

09.10.19

While there are still ATMs in Dubai that dispense gold bars, homes there are less gilt-edged. The largest city in the United Arab Emirates (UAE) was recently declared the world’s third most affordable for prime residential property.

According to estate agent Savills, prime property in Dubai averaged $600 per square foot in June; of the world’s major cities only Kuala Lumpur and Cape Town were cheaper.

A combination of poor economic data, property market reform and oversupply saw prices in Dubai fall to almost 30% below their 2014 peak at the beginning of this year, according to online property portal Bayut.

A slide in oil prices in 2015 sent Dubai’s wider economy into a protracted slowdown. Tensions with Iran and the UAE’s regional embargo on Qatar from 2017 reduced trade and compounded the city’s problems. Further, a new 5% sales tax at the beginning of 2018 harmed Dubai’s attractiveness as a tax-free centre.

However, many involved in Dubai’s property market trace its downturn back to 2013, when the government’s Land Department took action against so-called “flippers” — speculators who buy and then rapidly sell properties.

A new transfer fee increased the cost of buying, while the introduction of a mortgage cap tightened borrowing rules for expats. The effect was to dampen prices.

“For any purchaser the transfer fee was doubled to 4% [of the sale price] and, with the legal mortgage cap, it combines to make a perfect storm that, along with oil price fluctuations and the dollar [to which the UAE Dirham is pegged] becoming increasingly expensive, made the market look comparatively expensive,” explains Murray Strang, head of Dubai operations at Savills.

 

Abode Affiliates

  • Alleyne Real Estate
  • Blevins Franks
  • Coldwell Banker
  • Crane Resorts
  • The Hideaways Club
  • Monaco Real Estates
  • RDO
  • Rosemont Consulting
  • St Francis Links
  • Unique Home Stays
  • Yoo
  • Worldwide Dream Villas
  • Cyan International Properties
  • Enigma Yachts Limited
  • Cornerstone Tax Advisors
  • Lida Cucina
  • Pedini London
  • Alexander James
  • Wings
  • Moore Stephen
  • Ibiza Transit Express
  • Oyster Yachts
  • Jumeirah
  • Wall Street Luxury
  • Heron Real Estate
  • Edenhurst
  • MG&AG
  • Gama Property
  • Touch Design Group
  • St Edward
  • Ultra Villa
  • Luxury Italian Living
  • Habitat First Group
  • BDO
  • 7Storeys
  • Smart Currency Exchange
  • Strutt and Parker
  • Prestige Architects
  • Worldwide Property
  • Panorama
  • Dimora
  • Dominic McKenzie Architects
  • The Coastal House
  • Chamonix Ski Chalet
  • Luxe Caribbean Properties
  • Harry Manning
  • Smart Living
  • Isle Blue
  • MAS Marbella
  • London Fractions
  • QTD
  • Page Architects
  • Millgate
  • Jersey Finance
  • guernsey-relocations-logo
  • viberts-logo
  • b-williams-management
  • kpmg-logo
  • author-interiors
  • Wilkinson Beven
  • BoConcept
  • Ante Vrban
  • Experience Invest
  • Move 2 Gozo
  • Deborah Garth
  • Extex
  • You home
  • Ra Shaw Designs
  • Caudwell Collection
  • eastwood private client
  • accanto-interiors
  • Fritz Hansen
  • capital-rise
  • jarrods-staircase
  • neil-davies-logo
  • Tina Shone Group
  • Taplow riverside
  • Aimo
  • ns-ceramics-logo
  • Rusk
  • Consilium Expert Group
  • Ben Krupinski Builder

Enter your dream destination