Dubai property prices declined at an accelerated pace in the third quarter, with off-plan sales volumes impacted the most amid general market uncertainty, according to property consultancy Chestertons.
Average sales prices for apartments and villas have declined 6% from the previous quarter. Off-plan sales volumes were down 31%, compared with 11% for completed units.
The agent said in a report, that the downward price corrections witnessed in the first and the second quarter of this year have continued throughout the third quarter, albeit at an increased pace. And it is expected to continue given the pace of construction activity witnessed over the last couple of years and the number of units still in the pipeline.
Chestertons said that it would take policy reforms, a boost in economic activity and a decline in construction activity for supply and demand to reach market equilibrium. And this is unlikely to occur within the next 3 to 5 years.
S&P Global Ratings in September cut its credit ratings for two Dubai state-owned companies, saying a weakening economy in the emirate was hurting the government’s ability to extend emergency support to the firms if needed.
The ratings agency earlier this year in a report in February, predicted property prices in the emirate could decline by 10 to 15% over the next two years. And it did not expect prices to stabilize until 2020.