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While the decline in Dubai rental rates seems to have started to slow down in the Q3 of 2019, prices in the sector will continue to decline until the end of theyear, according to a new report by Chestertons, a real estate company.
About 50,000 new real estate properties are expected to be handed over this year in Dubai, and the emirate’s housing market may face an oversupply. Although this issue is controversial, and not all experts share this point of view. According to alternative sources, not all expected projects will be, in fact, completed on time, therefore, the level of realization will be no more than 30 per cent of the forecast.
According to Chestertons, the average in Dubai fell by 3% in the third quarter, while apartment prices fell by 4% compared with the previous quarter.
“As we expected, in the third quarter there was a further decline in prices both in the segment of apartment sales and in the sector of villa sales due to an excessive offers and moderate economic growth. However, the rental market has proven more stable with a noticeable slowdown in the pace of price reductions, ”said Nick Vitti, Managing Director of Chestertons MENA.
“We expect that the initiative to provide a for the purchase of a certain type of housing at a certain cost, as well as a whole package of other economic incentives and, perhaps more importantly, the , which is authorized to control the balance of supply and demand, will together contribute to a more favorable forecast for the Q1 of 2020, ”he added.
As for the rental market, here, as already mentioned, the rate of decline in prices has slowed significantly, and the average cost of annual rental for villas and apartments has decreased by only 1%, and this may be a sign of the beginning of market recovery, according to the report.
At the same time, the volume of transactions for the increased immediately by 45%, and their average cost increased by 46% to AED10.5 billion.
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