As soon the second quarter of 2015 ended, analysts have rushed to draw the first results and to identify key market trends in the Dubai real estate industry development. One of the first to report on the market pricing situation was Tasweek Real Estate Development, according to which house prices in Dubai have fallen by 10% year-on-year compared with the same period last year.
Among the main reasons for the decline in residential property prices in Dubai Tasweek experts named weak demand for luxury items, oil prices slump and US dollar strengthening. On average property prices in Dubai declined in different segments by 5-10% in Q2. Overall real estate sector performance, however, was "beyond all expectations", according to experts.
"With global oil prices sharply declining since mid-2014, real estate economic diversification has taken centre stage as the driver of growth in the UAE and across the region, which will have a positive spillover effect on the real estate business. Given the recent market shifts, the next half of 2015 will be an important indicator of how our industry will fare in the short to medium term as the UAE gears up for Expo 2020.”
“The high level of diversification, population growth, consumer confidence and regulatory support we have been observing over the past months reinforces our belief in sustained local market growth for this year and in the medium term,” Masood Al Awar, CEO, Tasweek, told the press. According to the report, Abu Dhabi, most likely, is expected to face further property prices increase in the near future, but Dubai in the remaining months of the year will have to face and eventually overcome the possible price fluctuations.
Residential and commercial property in Dubai is likely to be more resistant to price changes than hospitality sector, where a large influx of the new units to the market is expected in the run-up to Expo 2020. But the office property market in Dubai has shown good results in Q2 — prices here have risen by about 5%.
Rental market registered a decline in prices for one-bedroom apartments – by about 3%, but more spacious two and three bedroom apartments, on the contrary, have gone up in price — in average by 5-10%.