Dubai house prices 'bottoming out' following 3-year slump

Propertyfinder Group data shows median Dubai property sales prices have fallen by 20% in past 18 months
(KARIM SAHIB/AFP/Getty Images) Dubai Skyline, Real estate, Dubai property
By Staff writer
Tue 27 Jun 2017 03:09 PM

Dubai’s residential real estate sector appears to be bottoming out following a three-year price slump and with brokers reporting growing interest from potential investors, according to Propertyfinder Group, the real estate portal.

The property website said in a statement that house prices have been falling since mid 2014 in the emirate and are now at levels not seen since late 2012/early 2013.

In the 18 months to April 2017, median Dubai property sales prices fell 20 percent, according to Propertyfinder data while median rental prices dropped 21 percent over the same period.

Dubai is far more complete, more regulated and far more mature city today, said Lukman Hajje, Propertyfinder chief commercial officer.

Dubai’s slowdown contrasts with the overheated New York and Hong Kong property markets, he said.

With a further 28,000 new units in Dubai scheduled for release by year-end, Dubai prices could remain in the doldrums until 2018 at least but the pace of declines in both rental and sales values has also slowed, Propertyfinder data showed.

“In the popular Springs community, it is now possible to achieve net yields of up to 6.5 percent and net returns on equity of circa 10 percent for finance buyers using 75 percent loan-to-value mortgage products,” said John Lyons, head of Sales & Leasing at Espace Real Estate, a long-standing Propertyfinder client. “This provides great financial incentive to buy rather than rent.”

He added: “Although I’m not blind to the risks of buying a property in Dubai, I’m more optimistic than I have been at any time during the last three years.

“The inflationary risks of not buying should not be overlooked, particularly for anyone with a longer-term strategy in mind.”

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