Residential sale prices in Dubai are likely to soften in the remainder of the year by up to 5%, with rental rates slowing by 1% during the 3Q of 2019, according to Chestertons MENA’s Q3-19 Dubai market report.
With an anticipated 50,000 new units expected to be delivered in 2019, continued pressure on Dubai’s residential prices and rates has been a result of oversupply. A 150% increase in 2018 where supply topped just 20,000 residential units.
Nick Witty, Managing Director, Chestertons MENA, said: “As we anticipated, there were further sales price declines in Q3 for both apartments and villas due to excess supply and muted economic growth. The rental market proved to be more resilient, however, with a marked slowdown in the rate of decline,”
“We anticipate the 10-year residency visa, the economic stimulus package and perhaps, more importantly, the introduction of the new Real Estate Committee, which has the mandate to boost demand and control supply, contributing to a more favorable outlook in Q1 2020,” added Witty.
In the villas market, average sales prices were down 3% in Q3 while apartment prices witnessed a 4% decline from the previous quarter.
As for the rental market, the rate of decline has slowed with average villa and apartment rates down by 1 percent, which might be an indicator that the market has started to recover, according to the report.
The volume of off-plan transactions rose by 45% and the value for the same category increased by 46% to AED10.48 billion.