According to Moody's and CBRE trustworthy analytical reports, recent rapid decline in oil prices had little impact on the UAE real estate market in general and least of all in Dubai.
Despite the fact that oil industry provided two-thirds of the UAE consolidated income in 2014, the volatility of the oil market with a tendency to decline, seen in recent months, has little impact on the real estate market, Moody's experts said. Even in the UAE capital Abu Dhabi, the main property price indices are determined not by oil price, but rather by a lack of new supply in the housing sector. Therefore, in Dubai, which traditionally doesn’t depend on oil market dynamics, recent oil sector changes had little importance for the real estate market.
A much greater impact on prices decline in the real estate sales sector, according to CBRE, has had a number of restrictive regulatory measures taken by the Dubai’s government in order to control speculation. This factor, according to experts, played a crucial role in a significant housing prices decline in Dubai over the three last quarters.
Nicholas Maclean, CBRE Managing Director, believes that Dubai housing market is now trying to adapt itself to the new conditions and get back to the affordable housing model, which is also confirmed by a burst of activity of many Dubai developers, who had no least intent to quit construction of new facilities on the background of slower oil prices growth.
The same opinion is shared by Faisal Durrani from Cluttons, who also believes that the impact of the new stringent regulations on housing market was quite substantial, and predicts a further decline in property prices in Dubai before the end of 2015. And, until the end of 2017, according to Cluttons, Dubai housing market is expected to stabilize completely due to the coincidence of the levels of supply and demand. During this period, the market will bring about 20,000 new residential units and the city's population will increase, allegedly, to 400,000 people.