Dubai property prices said to drop nearly 14% in 2015

Dubai property prices said to drop nearly 14% in 2015
By Staff Writer arabianbusiness
Saturday, 16 January 2016 1:10 AM

Dubai property prices said to drop nearly 14% in 2015

Residential property prices in Dubai continued to fall during the fourth quarter of 2015, according to a new report.

Phidar Advisory’s Q4 Dubai residential research note said apartment sales prices declined by 12.7 percent during 2015, while lease rates decreased by 1.9 percent.

Lease rates for villas decreased 5.5 percent and sale prices fell by 14.8 percent, the report said, adding that average net yields are 6.7 percent for apartments and 5.1 percent for villas.
Compared to 2014, Phidar’s Dubai Real Estate International Demand Index dropped 83 percent by the end of 2015, primarily driven by exchange rate fluctuations.

The report also showed that 14,300 homes were completed in master planned communities and an estimated total of 18,600 new homes were completed across the city.

According to Phidar, the five-year supply pipeline in Dubai is growing at 3.6 percent compound annual growth rate (CAGR) compared to demand growth of 6.5 percent CAGR, largely due to jobs created by the development and running of the Expo 2020 project, which should start to ramp up in 2018.

However, when announced and launched projects are included the 5-year supply CAGR jumps to 5.7-7 percent, added Phidar.
“We monitor construction sites across the city to assess the supply pipeline, but also include a modest growth rate for areas outside of investment zones and master planned projects,” said Jesse Downs, managing director of Phidar Advisory. “This creates a more realistic estimate of total supply growth in Dubai.”

She added: “Global economic dynamics are tightening liquidity, increasing capital costs, and slowing growth in the region. These trends could continue for two years.

“Improving transparency can help bring down market risk, which is critical in the current environment.”

Posted on January 16, 2016 in Dubai news, Property, Real Estate

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