By Ed Attwood
Lower quality units fall by as much as 10% in Q4, some JLT office space drops by 30%
Property prices in Dubai are
set to decline still further in the first quarter of this year, although higher
quality units will see prices steadying, a new report has said.
Real estate consultancy
Landmark Advisory’s January sales guide said that villa prices in certain areas
had held steady during the last quarter of 2010, although a heavy influx of
apartment supply was likely to keep pushing prices for that segment downwards.
“Although we have not seen
as steep a decline in sales prices as we have with lease prices, there have
still been significant reductions and, what is more, this has happened
ubiquitously throughout Dubai,” said Landmark’s director of research and
advisory services, Jesse Downs.
“While price declines have
also affected more attractive, better quality units, it is certainly not to the
same extent. For instance, during Q4 prices for lower quality units in Dubai
Marina fell up to 10 percent, whereas higher quality units in the same area saw little
or no decline.”
Downs also said that
apartment prices had fallen consistently across Dubai, especially as this segment
was particularly dependent on quality because of greater choice for prospective
“Villa sale price
performance was a function of location, with declines much more significant in
Central Dubai, where, for instance, prices in The Springs and The Meadows fell
by over 12 percent,” added Downs.
“However, in other areas of
Dubai there was little change. For example, four and five bedroom units in
Victory Heights actually increased in price due to less supply available on the
market. However, the majority of these prices drops occurred in Q3, with Q4
itself being reasonably stable.”
On the commercial property
front, the Landmark research showed a continued focus on renting, although new
supply in Jumeirah Lakes Towers (JLT) had seen standard quality office space
value drop by as much as 30 percent.
“While we are no longer
seeing the same sorts of declines in sales prices that initially occurred post
2008, this is not to say that the market has fully bottomed out yet,” Downs
“It is our belief that
prices will continue to fall for a while. However, the relatively shallow
declines seen in the last quarter represent something of a boost for the
property market in the emirate.”
I think the figures are well underestimated for the first qtr of 2011 and after that...it can only get worse.
JBR can now be bought at below 800dhs/sqft. There are some units at 650dhs/sqft. Springs type 4's are coming down to 950,000dhs in places. Jumeirah Village will NOT shift because of all their community issues. International is a NO BUY zone and the same can be said of Discovery Gardens.
The Marina is steadily falling and as for JLT...well, thats just a very sad story. Rents have plummeted, retail and residential. Prices are below launch prices of 2006.
So many reasons NOT to buy in Dubai...it is hard to see why people would...unless people think it can't go much lower. My advice...THINK AGAIN!
This is awesome for those looking to buy in the future. I think Dubai will see more bloodshed in the real estate sector. We have not seen bottom yet. Wait and see as the real estate prices in Dubai will fall further this year.. I expect prices to bottom out some time this year or next depending on how much real estate prices drop this year. One thing is clear though and that is until real estate laws are revised,residency/ownership rules are revised,local community fees for these homes are revised and other basic costs of living are revised property prices will continue to fall. A tree can not grow without a base. In order to see growth the expats and buyers need to have a base and a sense of security. When this is achieved Dubai will see growth numbers.
Real Estate prices will keep on declining till the visa rules change and job opportunities improve in Dubai.
Difficult to survive only with tourist....we need end users to buy.
No jobs .......no end users.
Add to all the excellent comments above is the issue of quality of construction, and freehold laws. Why buy in Dubai when you can invest in other much more secure countries where investors have many more rights. I am no economist but I, like so many other ordinary people, saw the supply/demand issue rearing its ugly head over five years ago. It's not rocket science.
Clearly the key driver is the visa rule for home owners. Until this one simple thing is addressed, Dubai will not compete with other more attractive investments. Many say that other countries do not offer visa's, but those countries are not positioning themselves as a real-estate and investment tax free mecca. I sincerely wish someone would wake up and address this urgently, as the knock-on effect is quite significant, not only for property, but all aspects of the economy.
If you don't want to build a place for people to live and prosper, then terminate all developments and decide to make this a 100% oil based economy. Either way, as decision needs to be made.
This is a great place to live & work, dont get me wrong - but address the main issue, please please please!!
Unfortunately for many it will take a lot more than a change in the visa rule for any kind of stability and growth to return to the Dubai property market.
If you are one of the many who bought multiple properties and is now left paying for them without anything to show, or with large service charges and low rents, then you shouldn't expect people to feel sorry for you...after all, no one forced you to gamble! You bought them with the intention of making money via high rents or quick sales and you wouldn't have cared whose money you would have taken in the process.
I went to look at a villa for 250,000 pa in 2008, i liked it, offered the asking price and was told by the agent on the spot that the landlord said if i liked it that much I had to pay another 25,000....and I am supposed to feel sorry for him now?
End users without long term visa means nothing . Here after retirement you have to leave the country and leave your house .
All talk of Dubai real estate revival will remain hot air fiction in the foreseeable future unless and untill,the very primary issue of expat mainstay is addressed in this country.Short of citizenship,permanent residency is the only remedy that can jumpstart this ailing vehicle.A cursory review will reveal that more and more countries are opening up to self funding retirees and highly skilled professionals settling to ward of recessionary trends and quality skill shortages in their economies.When Malaysia,Suriname,Guyana,Australia,Costa Rica....and the list goes on can do it why can't Dubai or UAE?
@ Arthur, you seem so desperate, wonder why or may be i dont need to wonder why. You are welcome as a guest or tourist but not a permanent settler; this is not US, Down Under, Canada or Europe. Stop whining and have some contingency plan for the sake of your future and your family's.
If he is in a desperate situation, you should not make a mockery of it.
Your comment that people are only welcome here as a guest or a tourist is flawed. The private sector as well as the government sector did encourage foreigners to come to this country, enticed them with high salaries, and encouraged them to buy into the real estate sector. It was never a short term plan. Due to the crisis, there has been some negative sentiment towards foreigners. This is standard in any society at times of hardship, look at Europe and the US as an example.
As a self employed expatriate living in Dubai, I know that as long as I live by the rules of the land, and maintain my employment visa, then I am not a guest, I am a permanent resident of Dubai, for as long as i like. And there is nothing you can do about it.
That knowledge gives me the drive to live an honest life, work hard, and adapt to the culture of the land.