New research also says capital values across Dubai Marina and Jumeirah Lake Towers dropped by 5-7%
Apartment prices on the Palm Jumeirah, one of Dubai's most popular places to live, fell by 9.5 percent during 2018, according to new research.
The UAE Property Report by Savills also showed that capital values across Dubai Marina and Jumeirah Lake Towers, also popular with expats, dropped by 5-7 percent in the same period.
It added that prices for apartments in Downtown Dubai were down by 16 percent while values in the Burj Khalifa were 12 percent lower than the 2017 average.
Across the villa and townhouse segment, capital values on an average were down by 9 percent in Arabian Ranches, 12 percent in Meadows and Palm Jumeirah and around 14 percent at Jumeirah Park when compared to December 2017
Savills said Dubai’s residential real estate market was firmly in a correction phase during 2018 with inventory levels piling up across micro-markets as large schemes launched during 2014–2016 were handed over to the market. A slowdown in global trade and financial markets also weighed down on demand.
The report said that transaction activity declined by approximately 22 percent compared to the year earlier period and buyers adopted a wait-and-watch approach.
Off-plan (58 percent share) dominated transactions but its popularity in overall demand has declined from 67 percent in 2017.
Savills added that demand for ready-to-move properties increased due to the spike in project completions over the last twelve months with developers offering generous post-handover payment plans and other incentives such as partial or full waiver of associated fees to spur interest across completed properties.
The report noted that new project launches were limited to small and medium sized schemes. Supply addition was led by eminent developers with proven track records.
It said Dubai South East was the most preferred market for occupier demand with close to 48 percent of the total transactions concluded across sub markets in the district such as Emaar Hills, Dubai Hills and Meydan.
Supply and demand mismatch led to increasing pressure on asset pricing across the emirate, it added.
Steve Morgan, CEO of Savills Middle East said: “The UAE Government has made a number of bold, innovative changes to stimulate the growth of the economy and secure its long-term future.
"Through both public and private sector investment, we envision the UAE will continue its progress towards a diversified economy and a more mature real estate market. There is still some way to go towards recovery but we are starting to see investor optimism return.”