There was a rush to complete property sales in Dubai in the last 10 days of 2018 but experts are predicting that both prices and rents are set to keep falling in 2019.
Data from the Dubai Land Department (DLD) shows that some $5.1 billion real estate deals were completed from December 17 to 30 with more than 2,000 property transactions taking place.
Sultan Butti bin Mejren, director general of the DLD, believes it is an indication that the emirate’s property market is set to pick up at the beginning of 2019.
“These recorded transactions within a short time reflect renewed confidence in our real estate market, especially in light of Expo 2020 preparations,” he added in Propertywire report..
It looks set to be a buyer’s market in 2019. The mot up to take figures show that prices in Dubai fell by 7.4per cent in the third quarter of 2018 from a year earlier, up from a 5.8 per cent fall in the second quarter.
Data from REIDIN shows that prices have been falling quarter on quarter almost continually since the start of 2017 because of a worsening supply/demand balance.
In neighbouring Abu Dhabi prices fell by 6.1per cent year on year in the third quarter of 2018, a marginal improvement from the 6.9per cent fall recorded in the second quarter.
According to the Central Bank, one factor weakening demand for real estate is subdued employment growth in the United Arab Emirates, particularly among white collar workers who might buy homes. Most jobs in the wealthy oil-exporting country are held by foreigners.
Meanwhile, rents are also expected to fall in Dubai in 2019. The latest report from real estate consultancy ValuStrat said that locations likely to see declining rents include The Villages, Dubai South, Damac Hills, Dubailand, Hayat Townhouses, Town Square, and Mudon Villas, Dubailand.
The report also said that prime residential areas in Dubai, which saw relative resilience in 2018 may continue to see some improvement in 2019, however, values for some high yielding mid-affordable areas may experience downward pressures as a result of burgeoning supply, extending the prevailing buyer’s market.
The data from the firm also shows that prices for freehold properties declined 11per cent year on year and are now 22per cent below their 2014 peaks.
The highest annual declines of more than 15per cent were in Business Bay, International City and Jumeirah Islands, while locations with less than 6per cent falls included villas in Palm Jumeirah, Emirates Hills and Al Furjan.
The report pointed out that falling residential rents are one reason for softening capital values as investors faced lower yields on foot of deteriorating leasing rates. Asking rents were down 8.6per cent on an annual basis.