Dubai property prices said to fall up to $6,800 in past year
By Staff writer
Saturday, 28 May 2016 12:01 AM
Sales prices in some parts of Dubai have slumped by up to AED25,000 ($6,800) over the past year, according to a new report by Core, the UAE associate of real estate firm Savills.
Its latest Dubai Investment Outlook H1 2016 report said that while some of the emirate’s ultra-prime areas have shown relative resilience to price drops since Q1 2015, others have not fared so well.
The report revealed that prices in Jumeirah increased by an average of AED7,000 from Q1 2015 to Q1 2016, while Emirates Hills was down AED4,000 and Palm Jumeirah, down AED6,000.
It added that prices have dropped by AED25,000 in Jumeirah Islands, are down AED20,000 in Jumeirah Village and down AED16,000 in Sports City.
The half-yearly report analyses the outlook for the industry, the associated risks and potential returns of different types of real estate investments in Dubai for the next five years.
It said the winners will include established prime residential, Grade A prime location offices, Grade A warehousing, mid-segment hotels and serviced apartments, and international curriculum schools.
It added that the losers would be Grade B secondary location offices, affordable residential, and the four and five-star hotel market.
David Godchaux, CEO, Core, UAE associate of Savills, said: “Different investors have different risk appetites. We have not compared the returns or risks of different investment sectors, but have evaluated and compared risk rewards and tried to analyse what may be the opportunities – or potential segments – to look for over the next five years.”
He added: “The realisation that the market is ‘bottoming’ seems to have stimulated interest from investors and end-users, who have been waiting for several years for ‘deals’, prompting renewed enquiries for better, value for money products, especially in the prime residential segment.
“Coupled with the limited available new supply in the few established ultra-prime residential areas, our outlook continues to be steady in the mid-term until 2020.”
The report said socio-economic and geopolitical deterrents, along with a consolidating job market across the Middle East, are currently causing a decline on tenant demand in Dubai’s office market.
Godchaux said: “While demand for office space is expected to continue to be steady in DIFC through 2016-17, the office sales market is witnessing a drop in prices across all locations with secondary districts such as Business Bay, Tecom C and JLT seeing a higher year on year decline at 9 percent, 13 percent and 17 percent respectively. The fact that Downtown and DIFC are outperforming the secondary locations validates that strong investor and corporate occupier demand for quality Grade-A commercial products.”