Price correction in Dubai is "normal and inevitable"

The organizer of Cityscape Global said the decline in Dubai house prices is a "normal and inevitable" process.

Wouter Molman, director of the Middle East's largest real estate exhibition Cityscape Global, which is going to take place in Dubai in September, told the press that the current decline in prices in many sectors of the real estate market in Dubai is a "normal correction, which was always inevitable".

Conditions for the fall in prices, said Molman, formed in the housing market in a natural way, and the long-term development prospects remain positive. Molman also noted that Dubai residential property end buyers will benefit greatly from both the increase in the proportion of affordable housing on the market ahead of Expo 2020, and from general prices lowering as well.

After Dubai’s winning the competition for hosting the Expo 2020 World Exhibition Dubai real estate prices went up dramatically, but later, after all the necessary regulatory measures were introduces by the Dubai’s government, and rent index was adopted to clarify the situation for potential tenants, prices have declined. Molman considers such a scenario to be a sign of real market’s maturity.

"While a lot of the figures we are currently witnessing are not as positive as we’ve seen in previous years, it seems clear that the medium to long-term future for Dubai real estate is healthy," said Molman. "This is reflected in the build-up to the 14th edition of Cityscape Global, where we expect the biggest assembly of exhibitors since 2008."

Craig Plumb, head of research at JLL MENA, added: "We expect transaction volumes and, subsequently sale prices, to drop further in the second half of the year. But the single digit price correction we saw in the first half of the year is a sharp contrast to declines we witnessed in 2008/2009 and is a clear indication that the market is maturing."

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