Dubai’s property market is continuing to soften, with a revival in its fortunes unlikely to take place until at least the end of 2016, according to Cluttons.
The company’s Winter Residential Market Outlook stated that prices for apartments dropped by 0.8 per cent and villas by 0.5 per cent during the third quarter, meaning that overall prices for homes have dropped by 3.5 per cent year-on-year.
Cluttons said that although the rate of house price declines is slowing, the amount of new stock coming on to the market continues to grow. Therefore, it expects prices to continue to fall by 3 to 5 per cent next year.
More than 32,000 new homes were announced as part of Dubai projects launched at the Cityscape Global event in September, with 20,000 of these to be based within The Villages project announced at Dubai South.
Steven Morgan, the chief executive of Cluttons Middle East, said: “We expect 7,400 units to complete in 2016, 10,300 in 2017 and a further 13,600 in 2018, with the new schemes launched during the past quarter, helping to even out the balance between villas and apartments. Over the next three years, 48 per cent of the units delivered will be villas.”
Off-plan sales have remained popular, largely thanks to units being offered at a 20 to 30 per cent discount to completed homes.
Cluttons’ head of research, Faisal Durrani, said that although many of the new, off-plan launches have brought to market advertised as “affordable” properties, but this segment of the market remains “vastly underserved”.
“The authorities need to formalise the definition of affordable housing, in terms of those who could qualify and the type of housing that needs to be created, otherwise there is a real danger that the term ‘affordable’ will be permanently diluted.”
mfahy@thenational.ae
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