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Dubai property price decline to slow down in 2020

17.11.2019
Real estate prices average yearly decline is expected to reach 11.3 this year, but 2020 promises the decline will slow down.

Experts predict that, in accordance with the growing demand in the Dubai real estate market expected in 2020, prices will be adjusted by 5-7 per cent, as evidenced by the latest research data.

Leading market players and industry analysts believe that the real estate sector in Dubai has become a mature market after prices dropped to almost a seven-year low losing 23.4 per cent of the average cost over the past five years. But at the same time, it is forecasted that the return on investment in real estate will decrease to a more practical and realistic level, since the market will achieve stability next year. Areas in which the number of completed projects is close to almost 90 per cent today offer very good prices.

Hider Tuaima, head of real estate research at ValuStrat, said Dubai’s average price per square foot is now close to 2012, dropping down to 1000 dirhams per square foot. As a result, there is a new trend in annual sales growth.

New housing is actively being purchased by investors as well as end users, and in record numbers. This trend is pretty much reflected in the ValuStrat Price Index, which fell by only 0.8 per cent in a month of October.

It is expected that the decline in housing prices will continue in 2020, but at a slower pace compared with the current year, ValuStrat said in its report.

Statistics data have already begun to depict some sales growth. Last week, Property Finder announced that October was the record month for Dubai property sales, when the Dubai Land Department registered 4,774 real estate transactions, the highest since 2008.

According to experts, investors who expect to get the highest return in Dubai should focus on low and medium market segments, especially on small apartments located in such areas as International City, Discovery Gardens, Dubai Production City, RemraamJumeirah Village, The Greens and Dubai Silicon Oasis.

Returns on investments in locations like Jumeirah Village Circle are still high, but capital gains there are not so obvious. At the same time, the central Dubai MarinaPalm Jumeirah and Downtown Dubai, where the level of completed projects and development reaches 90 per cent, offer lower returns, but with capital cost remaining consistently high.

To date, the return on investment in some areas has decreased, but the average return for Dubai’s housing investments is still at a stable level of average 8 to 10 per cent.

But, as specialists use to say, Dubai always surprises everyone. In 2002, for example, when the JBR area was being built up, among real estate professionals there was a concern about the oversupply with new apartments. But nothing happened, and the market absorbed all the new housing.

To always stay up to date with the latest analytics data and real estate prices in Dubai, subscribe to our newsletter using the form below. And in order to sell, lease or buy/ rent housing or commercial properties in Dubai, contact IMEX Real Estate. Our contacts:

Tel. in Dubai, UAE: +971 (50) 2528188 (Whatsapp, Viber, Telegram)

Toll Free Dubai: 800-IMEX (800-4639)

IMEX REAL ESTATE BROKER LLC, UAE

Office 2502, Marina Plaza, Dubai Marina, Dubai, UAE

Email: pm@IMEXre.com

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