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Gulf Sotheby's predicts 2018 to become a turning point for property prices in Dubai. After several years of decline prices in most Dubai areas will see an uptick, especially in the ready segment. Read more to find why.
A significant and constant decline in property prices in the UAE recorded over the last 12-18 months has made Dubai housing the most affordable in comparison with 9 other major international cities, in terms of cost per square foot. However, the reputable Gulf Sotheby's consultancy predicts that as early as in 2018, Dubai real estate market can expect a new price upsurge, especially in the ready housing sector.
"The lower pricing has mainly been a result of several off-plan launches in the affordable segment," the report by Propertyfinder said referring to the Gulf Sotheby's data.
However, "This strategy cannot be sustained over a long timeline, as it adversely impacts the bottom line - that's why I am convinced pricing will revert back to more normalised levels in 2018," said Gulf Sotheby's managing partner Kalpesh Sampat.
According to the natural cycles of real estate prices falling and rising at the emerging housing markets, property prices in Dubai are currently close to the lower threshold of the cycle and will start growing in the run-up to Expo-2020.
Besides, the number of housing unit offers in affordable residential communities in the sub-one million AED, sub-one thousand AED per square foot segments, which were historically underserved during Dubai’s earlier construction booms, will increase substantially, the report says.
In addition, the population growth outpaces new supply by two to one in Dubai, and 2018 will likely follow a similar trajectory, with strengthening demand potentially offsetting the rise in supply.
Property investments were also found to still command healthy yields of six to eight percent, suggesting that Dubai and Abu Dhabi remain attractive options for investors-turned-landlords.
Finally, the report notes that homeowners remained largely unaffected by changes in the UAE's tax policy (VAT introduction), and still do not have to pay taxes on capital gains, increases in property value, wages or rent in the UAE.
More details on the impact of the VAT introduction on the Dubai real estate sector can be found in .
