By Sam Bridge
Property Finder research says rate of decline in property prices in Dubai slowed considerably in the second half of 2019
The rate of decline in property prices in Dubai slowed considerably in the second half of 2019 as buyers began to take advantage of the value to be found in the market, according to new research from Property Finder.
The UAE-based property portal said that although advertised prices continued to fall in most areas in H2, the rate of decline slowed sharply.
The report said it is likely that prices will stabilise in 2020, before recovering in 2021, as delivery rates of new supply start to fall.
It added that property launches have reduced considerably since last year and with a new committee in place to balance supply and demand, developers are more likely to focus on completing their existing projects.
According to Data Finder, the real estate data and insights platform under the Property Finder Group, asking prices of Dubai villas declined at a rate of 3.2 percent, down from a rate of 4.3 percent in the first six months of 2019.
Apartments fared better in Dubai, with prices falling 1.1 percent, down from 3.9 percent in H1 2019.
Richard Waind, group managing director, Better Homes, said: “I do not expect to see any further major falls as developers will hold their top line, offering incentives instead of price reductions, and we are now seeing the natural ‘hand brake’ to price falls in the secondary market - namely the inability and unwillingness of sellers to drop prices further.
"Whether it is due to negative equity or simply a refusal to go lower, an increasing number of sellers are withdrawing from the market and opting to hold their assets, which is creating a lack of quality listings in the secondary market. Distress sales and real bargains are becoming more and more scarce and I suspect it won’t be long before prices in the secondary market start to regain some ground.”
In the apartment category, communities that registered the biggest six-month asking price declines in H2 2019 were Barsha Heights or Tecom (-13.4 percent), Jumeirah Lakes Towers (-11.9 percent), Damac Hills (-9.7 percent), Discovery Gardens (-7.7 percent) and Dubai Marina (-7 percent).
In the villa/townhouse market, communities that recorded the biggest six-month asking price declines were JVC (-8.7 percent), Jumeirah Village Triangle (-4.6 percent) and Motor City (-4.5 percent).
Dubai registered 41,988 overall real estate sales transactions in 2019. Of those transactions, 23,643 were for off-plan properties and 18,345 for secondary properties.
Asking rental prices continued to fall at a faster rate than sales prices in many places. Advertised rents for Dubai apartments fell by 2.4 percent in H2.
Dubai villa/townhouse advertised rents also fell by 2.9 percent, but at a slower rate in H2 as more apartment tenants turned their eye to villa living.
The research said that at least 61,646 units are expected for 2020. Dubai’s housing market added 48,729 new units in 2019, which was the highest number of units completed in one year over the last five years.