By Staff writer
New KPMG report says 2016 may be another 'challenging year' but market is likely to see upturn in 2017
Dubai's residential real estate market, which has seen price declines for the past year, is likely to witness a rebound in 2017, according to a new report.
KPMG's review of Dubai's property market predicted that while 2016 may be a "challenging year" due to a number of internal and external factors, the market should see an upturn next year.
While certain areas of Dubai have been more impacted than others in terms of declining prices, the overall magnitude of the decline has been tempered, said KPMG.
It said that this is a result of "vastly improved regulations", adding that affordable housing areas have incurred lower declines and, in some cases, even maintained value or rental yield.
The report indicated key trends that will drive the Dubai residential real estate market in 2016 and beyond.
It said liquidity is likely to become increasingly important as markets continue to tighten while oil prices will continue to influence and are unlikely to recover in the short term.
The report added that as supply and demand are not currently balanced, certain areas and segments are significantly more attractive than others - with a premium for quality.
KPMG also said there will be a drive towards affordable housing, with increasing amounts of housing coming onto the market at prices that both compete with the rental market but also appeal to a much wider demographic.
The report also identified Expo 2020 as having a direct and indirect impact on the real estate market.
Sidharth Mehta, partner and head of building, construction and real estate with KPMG Lower Gulf, said: "While oil prices remain well below the long term average, which is clearly having an effect on market confidence, Dubai's improved regulatory environment, broader investor profile, and increased maturity are all indicators that its real estate market should eventually self-correct."
Kaushal Dayal, director with KPMG's management consulting practice, added: "After 2008, a number of measures were put into place to regulate the Dubai real estate market. The Real Estate Regulatory Agency (RERA), the introduction of mortgage caps and the establishment of the Al Etihad Credit Bureau have mitigated a lot of uncertainty in the market - even in the face of economic pressure from falling oil prices, currency fluctuations and geo-political uncertainty."For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.