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When real estate prices in Dubai will start to grow? This is the question owners and potential home buyers ask themselves constantly, but looking forward for the next calendar year, this issue becomes even more acute, than usually. What to expect in 2017? It should be noted that the analytical agencies, including authoritative ones and those with the well-deserved reputation, give quite contradictory forecasts in this regard, which, incidentally, also affects the terms of the current situation changing.
Eternal optimism is a common attribute of the Dubai’s property market, Jesse Downs, managing director at Phidar Advisory said recently in her interview to the local press. She has also warned against any “positive information biases” as they only make market more volatile.
“Focusing only on the positive is neither an accurate representation of nor a benefit of the market,” Downs said. She also made her own forecast for Dubai property prices upturn: in 2017 housing prices will either remain flat, or will keep showing a slight decrease, while a distinct market recovery could be expected only by the end of 2017 — the beginning of 2018.
Reasons for this particular pricing scenario in the Dubai real estate market are explained by a number of mid-high and high-income jobs being made redundant, not only in Dubai, but also in Abu Dhabi. Thus, the demand from "white collars" buying property in these cities is also reduced. Two other factors that affect pricing are oil prices and the US dollar, which don’t give any reliable reasons for optimism either.
Some analysts, like JLL, predict a 4-5% rise in Dubai house prices next year, considering that the market “has now reached the bottom of its current cycle”, while others, like Asteco, just confined their forecast to general statements about a bounce in Dubai rental prices in October-November of 2016. However, Phidar Advisory calls that current surge in prices a “little bump” and a “fairly predictable seasonal bounce, a by-product of the eternal optimism in this market.”
As the result, a supply/demand balance is expected to put everything in place. And in this equation it is the supply part that is manageable, and if the developers will be able to "catch the pulse" of the market right and bring the exact number of new property units the market can consume, or a little less, then prices may have start to grow.
Anyway, even if the gloomiest forecasts are about to fulfil, property buyers will have another year to buy an apartment in Dubai before the next price increase cycle starts, which is inevitable, all analysts agree. The only question is how much the price will rise and when it’s going to happen. And only time can give a precise answer to this question.
