Dubai's residential market experienced further declines during the fourth quarter of 2015, with sales rates falling by 4 percent drop and lower sales volumes recorded, according to real estate consultancy firm CBRE.
Its Dubai Annual Market Update Report said that average residential sales rates have fallen 16 percent and 14 percent year-on-year for apartments and villas respectively, while overall unit transactions declined by 33 percent year-on-year.
CBRE said the residential sector is expected to see further sales price deflation in the coming months as supply levels gradually pick up, resulting in further falls for both rentals and sales values.
Approximately, 48,000 units are expected to be delivered between 2016 and 2018, its report added.
Mat Green, head of research & consultancy UAE, CBRE Middle East said: “With the actual delivery of units falling short of anticipated supply levels, the occupier market has held up comparatively well, particularly for more affordable locations such as Jumeirah Village Circle, Dubai Sports City and Dubailand Residences which all achieved rental growth.
"As has been the trend, prime areas such as the Palm Jumeirah, Dubai Marina and Downtown Dubai continued to see rental deflation with rates falling between 1-3 percent during the quarter.”
Commenting on the commercial office market for 2015, Green added: “The sector has remained steady despite the emergence of more challenging economic conditions in the region amidst a period of lower oil pricing. Prime rents have been stable with no change recorded year-on-year.
"However, there has been a pick-up in pre-leasing activity during 2015, reflecting the presence of latent demand for good quality single owned office accommodation in locations such as Dubai Media City, D3, Trade Centre and JLT.”
CBRE said the total office stock during 2015 stood at 8.5 million square metres, compared to 3 million sq m in 2007. Future supply of 1.1 million sq m is expected to be delivered between 2016 and 2018.
“Demand for good quality office accommodation across single-held towers is expected to remain firm, driven by expansion within Dubai’s private sector employment base. This will ultimately lead to further speculative office starts over the next 12 months, with activity likely to be focussed on the Freezones and the CBD area,” said Green.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.
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