Prices of homes in Dubai continue to decline as more corrections are implemented in the sector. Housing declines by 10 percent annually across different residential communities. It is said that the annual house prices in Dubai decreased by 10.6 percent. This is according to the Dubai House Price Index for February 2019. There are some communities that are said to show even higher declines. Some of the areas that experienced more than 11 percent decline are the following: Dubai Sports City, Discovery Gardens, Arabian Ranches, Emirates Living, and Jumeirah Islands.
It is expected by market experts that this decline will continue for this year and will start to stabilize on 2020. Recovery will not take place until 2021. Savills Middle East disclosed that a decline of 5 to 10 percent in terms of residential real estate prices in Dubai will continue this year. This will add to the 6 to 10 percent decline in the Dubai residential property prices in 2018.
The situation is in fact positive development for interested investors. the 10.6 decline in house prices in February 2019 will encourage investors to improve the sales momentum. A credit analyst on the other hand stated that the decline by 10 to 15 percent could continue in 2019 and another 10 percent on 2020. The decrease in Dubai’s house prices amounts to Dh 2.6 million.
According to the Dubai House Price Index, the residential property types that have experienced the decline have been the same since 2015. Apartment and villa or townhouses have declined by 16 to 18 percent as of February of this year.
Residential property prices have been continuously declining since the second half of 2014. It is approaching property sector crash levels. Dubai property prices and rents have declined over the past few years by 22 to 33 percent in nominal terms.
Asteco, on the other hand, stated that with additional supply, there will be continuing pressure on rents. The rate of decline is expected to till the end of 2019. Such low rents will enable tenants to move up with regard to location, size, and quality. An additional supply of 30,000 residential units is expected. About 3.6 million square feet of office space will be brought to the market. This includes the number of handovers that were scheduled for 2018.