By Bernd Debusmann Jr
Cavendish Maxwell chief economist Julian Roche said that the UAE's customer base is expanding
Drops in property prices across the UAE will create millions of new potential clients, representing a “silver lining” of a sluggish property market, according to Julian Roche, the chief economist of Cavendish Maxwell.
In its 2019 UAE property market report, Cavendish Maxwell fond that average apartment prices fell by 15 percent in Dubai over a 12-month period between Q4 2018 and Q4 2019.
Some areas – such as Discovery Gardens and Jumeirah Village Triangle – saw prices fall as much as 23 percent.
Additionally, the report found that average prices for villas and townhouses declined nearly 18 percent over the same period, with particularly steep declines seen in Victory Heights (22.3 percent), the Meadows (24.3 percent) and Jumeirah Village Triangle (22.8 percent).
Roche, however, said that the falling prices may ultimately benefit Dubai’s real estate market “as things become more attractive for more or less everyone”.
“Incomes continue to outpace property price growth,” he explained. “There is a silver lining to the fact that the market has been relatively slow – the customer base is expanding. It is globalising and expanding, and that represents opportunity.”
Roche added that “by 2024, when most developments are going to come about, the opportunities for people in China and India are twice what they were 10 years ago.”
Because of wealth distribution in these markets, Roche added, the UAE might see “three, four, or five times”’ as many people interested in investing in the its real estate sector.
“We are taking about millions of potential clients. The economics and the real estate actually work together,” he said. “We have to move out to wider audiences.”
The Cavendish Maxwell report also found that apartment rental prices dropped an average of 13.4 percent in Dubai, while villas and townhouses registered a 9 percent drop.
More than 50,000 new units already under construction will hit the market in early 2020, the report estimates.