Buyers from European countries are now spending less because their currencies have declined against the dirham, Bloomberg reported.
Falling oil prices and a tax on foreign property held by Indians are also pushing down home values in the emirate. A year ago, Dubai regulators took steps to cool a market where home values had been climbing at the fastest pace in the world.
Investor sentiment “can change rapidly,” said Gregg Lemos-Stein, managing director of corporate ratings at Standard & Poor’s. “Buyers will hold off on any kind of activity and wait for prices to fall. That can exacerbate the decline.”
S&P predicts a price drop of 10% to 20% this year, according to Franck Delage, associate director of corporate ratings for Europe, the Middle East and Africa.