It is often thought that a drop in sales indicates a slowdown in the housing market. However, in the case of Dubai, a fall in prices could actually be a positive sign.
Sure, developers are not seeing the same frenzy over new launches as earlier. In fact, Danube Properties' latest launch - Glitz 3 (a development of 352 apartments) - didn't enjoy the same rush of buyers as its previous two launches and the company's chairman Rizwan Sajan said the market appeared to be "slow." Residential property values have fallen with average prices now hovering around what they were during January last year, according to ValuStrat's Price Index.
However, this isn't necessarily a bad thing. In fact, it's an indicator that the market is moving towards maturity as investors are not simply looking to make a quick buck by investing in the latest launch. On the contrary, buyers are weighing their options carefully and developers will increasingly need to appeal to the buyers' sense of value. This is especially relevant at a time when the emirate is seeing the launch of 14 projects in the first five months of 2015.
Local consultancies such as Valustrat has revealed that time is right for renters in the emirate to become homeowners as equated monthly installments fall below their monthly rental outgo.
Meanwhile, Dubai's financial free zone hopes to attract new residents by reviving retail offerings to make the precinct a round-the-clock destination. Dubai has no shortage of shopping malls, but Brett Schafer, the chief executive of DIFC Properties, has rightly identified that most of the city's popular shopping destinations get busy at night and on weekends. The retail spine they hope to launch would provide amenities for residents living in the area, making it a downtown centre for those in the neighbourhood.
The apparent slowdown may indicate the start of a new housing phase, where people are buying property to live in, rather than as a short-term investment to flip on.