New research shows average sales prices and rents softened across most communities in the UAE during Q3
A prolonged softening in prices and rents has made the UAE property market more accessible as homes become affordable to more people, according to a new report.
Cavendish Maxwell's UAE Property Market Report for Q3 2019 showed that average sales prices and rents softened across most communities in Dubai.
Average apartment prices declined by 16.5 percent over the 12-month period from Q3 2018 while average villa/townhouse prices declined 15 percent during the same period.
Rental declines for apartments in Dubai averaged 15 percent, while villas/townhouses registered a 12 percent fall compared to Q3 2018.
Price declines in Abu Dhabi were slightly less steep than Dubai, averaging 15 percent for apartments and 12.7 percent for villas/townhouses during the same period.
The average annual rental decline for both apartments and villas/townhouses was 13.7 percent in the UAE capital, the report said.
The report added that the Northern Emirates continued to be impacted by falling rentals and sales prices in Dubai and Abu Dhabi.
Supply remained the primary driver for price declines with developers attempting to entice buyers with attractive payment plans, Cavendish Maxwell said.
It said office rents continued their decline into the third quarter across the UAE with landlords settling on lower effective rates and providing incentives. In Q3, businesses have continued to restructure their operations and limit exposure to real estate by consolidating multiple offices spaces into one.
The report noted that the office market in the UAE capital saw rents decline 2-3 percent on a quarterly basis on muted interest from the oil and gas sector which is one of the bigger tenants.
The report said: “A prolonged softening in prices and rents has made real estate more accessible to and affordable for owner occupiers and tenants. Supply continues to provide direction to prices and rents in Dubai and will do so as more projects materialise in the upcoming quarters.
"However, with the establishment of the real estate planning committee by His Highness Sheikh Mohammed bin Rashid Al Maktoum, a balance between demand and supply is expected to be achieved, improving projects’ value proposition and boosting confidence in the sector. The positive impact of the move is already evident with real estate transactions in Dubai more than doubling since the announcement of the committee.”