By Bernd Debusmann Jr
The head of research at real estate investment and advisory firm JLL also explained government efforts to control oversupply in the market, the impact of Expo 2020 Dubai and the long-term forecast for the emirate
Dubai’s real estate market is expected to go through a period of “stabilisation” over the coming years, even as it continues to hover near the bottom of the market in 2020, Dana Salbak, the head of MENA research at real estate investment and advisory firm JLL, said in the second episode of the newly launched Arabian Business podcast.
In the episode, Salbak said that the rate of decline in the real estate market slowed in 2019, with sales prices falling by 1 percent for apartments and 3 percent for villas in Q4 compared to Q3 2019.
Higher declines were recorded on an annual level, with apartment rents and sales prices declining by 8 percent and 5 percent, respectively. Similarly, villa rent and sales prices declined by around 8 percent and 10 percent respectively when compared to the same time period in 2018.
Additionally, the JLL statistics shows that “primary” areas of decline continued to perform above average. Secondary locations – such as Motor City, JVT and JVC – saw steeper declines.
Despite the continued declines in 2019 and previous years, Salbak said that the market is “not quite” where it was in the difficult period of 2008 and 2009.
“The market is really adjusting, more so than being a ‘crash’ or a bubble burst,” she said. “We’re actually quite positive and optimistic. It shows the market is more mature and more sustainable. We’re calling it a period of normalisation.”
In the near-term, Salbak said that sale and rental prices are likely to remain near the bottom of the market.
“We think the market will hold for some time, and potentially see further declines for some time, but nothing drastic that should scare anyone,” she said.
“I think [rent and sales prices] will continue to fall, but at a much slower rate.
“The market will remain tenant friendly, and tenants should definitely push for lease negotiations,” she added.
During the podcast, Salbak also explained government efforts to control oversupply in the market, the impact of Expo 2020 Dubai, the long-term forecast for the emirate, and how Dubai fares compares to other cities around the region and globe.