Average residential sales rates for apartments in Dubai fell by 4.6 percent annually in the fourth quarter of 2016 but remained flat quarter-on-quarter, according to a new CBRE report.
Rents in Dubai fell by an average of 1 percent in Q4, said CBRE's Dubai Annual Market Update Report.
While average apartment sales rates fell by 4.6 percent in 2016, the drop for villas was more pronounced at 6.5 percent, the report said, adding that the residential sector is expected to see more stable sales pricing during 2017 as sentiment slowly starts to improve.
However, CBRE said there is a cautionary note with the recovery amid rapidly rising supply levels. Approximately 70,000 units are expected to be delivered between 2017 and 2019 as developers make a major push in the build up to Expo 2020.
Mat Green, head of research & consultancy UAE, CBRE Middle East said: “With an expanding pipeline of new units, current deflation trends are likely to continue throughout 2017, with many new homes set to complete.
"However, there are signs that the transactional market is once again stabilising with no major change in average sales rates noted during the past two quarters, although on a year-on-year basis, residential values have still fallen by an average of 5 percent.
He said Dubai's commercial office sector has evolved into a clear two-tiered market, with prime accommodation, particularly in the free zones, attracting strong demand. However, the secondary market continues to weaken, with a 12 percent annualised decline in rental values brought about by a persistent oversupply of strata office product and a general softening of demand fundamentals.
The total office stock during 2016 rose to 9.1 million sq m, compared to just 3 million sq m in 2007. Future supply of 0.9 million sq m is expected to be delivered between 2017 and 2019.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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