No slowdown in Dubai real estate
Filed on November 8, 2015 | Last updated on November 8, 2015 at 06.34 am
Market settling down, prices holding firm.
Dubai property prices are staying firm after settling down over the past 30 to 60 days following a fall triggered by global and regional factors including oil’s slump, weaker currencies in Russia and Europe and flare-ups in Yemen and Syria.
Sultan Al Akraf, head of real estate registration at the Dubai Land Department, or DLD, said there is currently no sign of a slowdown in Dubai property transactions irrespective of reports on the contrary. “The going is strong and market dynamics are favourable,” he said at the Dubai Property Show in Mumbai, adding that the emirate’s real estate market is stable and witnessing sustainable growth.
Sanjay Manchanda, chief executive officer of Nakheel, said being an international city, Dubai was not immune to the impact of the global economic slowdown over the past one year.
“But we are seeing a resilience as the market had settled down and prices are holding firm,” Manchanda told Khaleej Times on the sidelines of the three-day show organised by Sumansa Exhibitions in partnership with the DLD. The show has lined up 35 property developers from Dubai.
“We have not dropped our prices,” Manchanda said in response to recent reports suggesting that property prices had fallen in Dubai over the past one year.
According to real estate consultancy Knight Frank, Dubai property prices fell by 12.2 per cent during the past year, the largest drop in the world.
The decline in the 12 months through June was the biggest in 56 mainstream residential markets and larger than the 12 per cent fall in real estate prices in Ukraine, which has been hit by almost two years of protests, a separatist insurgency and political upheaval, Knight Frank said in a recent report. Prices in Dubai fell 2.8 per cent in the second quarter. Hong Kong was the best performing residential market, with prices up by 20.7 per cent.
The report said over the past decade, Dubai’s property market has swung from boom to bust and back again. Price gains in the two years through 2014 recouped much of the losses incurred in a 2008 collapse. Then, prices started falling again this year amid oil’s slump and weaker currencies in Russia and Europe. “Weaker demand, a strong US dollar and ongoing cooling measures have dampened sales volumes in the mainstream sector,” Knight Frank said.
According to a separate report released on Saturday by Cluttons, the slump in Dubai real estate looks set to continue.
Villa prices will fall by a further five per cent to seven per cent in the second half of the year, it said. Rental prices are also weak and are expected to drop another 1.5 per cent to two per cent in the second half, Cluttons said.
Investment management company Jones Lang LaSalle has also reported that Dubai residential prices have fallen maybe nine or 10 per cent this year.
“We expect prices to go down further over the rest of the year and the decline has more to do with what is going on globally. Things like falling oil prices and the global nervousness with the Chinese economy slowing,” Craig Plumb, Middle East and North Africa research director for JLL, said.
“The Dubai residential market is very much affected by what’s going on in the rest of the world because a large number of people buying here are investors coming from overseas,” said Plumb.
Plumb said prices are likely to fall for 12 more months, while forecasting the drop for this year at 15 per cent.