By Staff writer
JLL says residential real estate market is poised close to bottom but recovery in prices, rents still months away
Dubai's residential real estate market is currently poised close to the bottom of its cycle although any recovery is unlikely before the end of the year, according to a new report.
JLL's Q1 2017 Dubai Real Estate Market Overview report said tthat while rentals have recorded a decline over the past year (down 7.9 percent for villas and 2.9 percent for apartments), there has been barely any change during Q1.
"This suggests that the residential sector is currently poised close to the bottom of its cycle. The key question concerns the timing of any recovery," JLL said.
It added that given the continued slowdown in the Dubai economy, and its dependence upon the global economy where growth remains uncertain, any recovery in residential prices in Dubai is unlikely before late 2017 at the earliest.
JLL's report said around 2,600 units were completed during the first quarter, with apartments comprising more than 60 percent of completions.
A further 28,000 units are currently under construction and scheduled for delivery by the end of 2017, it said, adding that actual completions are likely to be far less.
Craig Plumb, head of research, MENA, JLL, said: “With Dubai’s real estate market showing signs of maturity and the subsequent REITs entering the market, changes are already taking place in other sectors of real estate.
"The residential market remains a favorite destination of investment among Indian investors and according to recent data released by Dubai Land Department (DLD), there has been AED12 billion ($3.3 billion) worth of property transactions that have incurred among investors from India.
"Although the residential market continues to slow down, this figure highlights the potential the sector has in terms of growth in the future,” he added.