Real Estate Market Remains Sluggish in Dubai

Not enough buyers are purchasing real estate in Dubai currently according to a consulting firm.

At the rate currently in the real estate market and without something taking place to turn things in a different direction, home prices across the emirate could continue dropping through all of next year, according to the consulting firm.

The next growth cycle said the firm would then have to wait until the last two years prior to the 2020 Expo in Dubai.

During the third quarter, prices of apartments dropped by 3% compared to their price during the second quarter.

In the past 12 months through the end of September, values are 11% lower, confirming that Dubai has been a buyer’s market.

Not enough buyers are in the market at this point with only 4,000 transactions in the second quarter of 2015 and since mid 2011, values have dropped tremendously.

Data showed that sales volumes reached a peak during 2013 with 33,800 overall transactions and dropped significantly by 30% in 2014 to just 23,800 transactions.

The value followed a pattern that was similar as it peaked in 2013 only to decline 22% during 2014.

Prospective homebuyers keep holding on without buying, hoping to see prices drop even more.

In the luxury market, the number of inquiries has dropped but the same number of sales has taken place.

However, action could increase in the sectors mid tier space with developments like Dubai South and Jebel Ali Gardens being the likely beneficiaries.

In what might have far-reaching consequences for the real estate market’s stability in Dubai, there is now a clear drop in the amount of homes that are completed.

While the quarter saw over 1,700 home delivered, a number of the projects scheduled initially for handover during the second six months of 2015 have been pushed back to 2016-17, as the real estate market continues its softening and developers phase their projects in line with today’s demand.

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