Dubai property prices are doomed to keep falling, according to TheNational. What’s the root cause of this phenomenon? How can we expect Dubai’s real estate prices to evolve in the coming months?
More units available on the market
More units are becoming available on Dubai’s real estate market. Indeed Dubai’s property developers are “racing against time to complete and handover residential projects (…) as they completed record 20,978 units in first half of 2019.”
Residential stock in Dubai will reach 630,000 units by the end of 2020, representing an increase of 10%. While this might be good news when real estate prices are going up too quickly, it may be considered bad news when property prices are already going down. And that’s the case in Dubai, property prices go down since 2014.
“With a record number of units expected for the second half of the year, we can expect prices to decline further as the market continues to absorb these units”
Lynnette Abad, director of data and research at Property Finder
Dubai’s top developer is fleeing to China: is that a sign?
Emaar, the United Arab Emirates’ largest publicly traded developer, will partner with Beijing Daxing International Airport to develop an $11 billion project in China, according to Bloomberg. Why would they expand to China? Apparently, the developer “has been struggling with slow demand for properties in Dubai as prices decline amid a surge in the supply of homes”.
When will property prices stabilize in Dubai?
Standard & Poor’s analysts say prices will stabilize in 2020, after 6 years of continued decline (-25%) in real estate prices. And on the rental market, this is also true. Indeed over the past two years, average rent rates for apartments “have dropped by 21 percent” all because of increased housing supply and popular trends in the market. Some observers even say that Dubai tenants may demand “rent-free periods“…
All the more reason to keep following the evolution of property prices in Dubai!
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