The sales market in Dubai is slowing with the latest figures from the Land Department showing that they halved last month compared with a year earlier.
Transactions fell 51.8% in April compared with the same month in 2014 and the total value was DH35.3 billion, down 37.1% year on year.
According to the industry sales have been falling steadily since the end of last year after the Dubai government introduced tough new mortgage caps and higher transaction fees in an attempt to slow what had been one of the fastest rising housing markets in the world.
Real estate consultants JLL and the ratings agency Standard & Poor’s are predicting that average house prices in the emirate could fall by between 10% and 20% this year while Deloitte has estimated that they will fall by 1% and 5% in the first half of this year. Indeed, according to CBRE average house prices fell 2% during the first three months of 2015.
‘These figures come as no surprise although from the face of it they look quite dramatic. A fall in volumes is a good leading indicator that prices will fall and we expect that to continue for the rest of this year. Last April the market was still booming, so any year on year figures will reflect that fact,’ said Craig Plumb, the head of research at JLL’s Dubai office.
And the latest quarterly report from Phidar Advisory shows that residential prices in the first quarter of 2015 continue to decline, compared to the previous quarter. However, it is not all bad news according to Jesse Downs, managing director of Phidar Advisory as the market downturn is attracting selective opportunistic investment.
The report also shows that overall prices fell by 3.9% in the first quarter of the year while apartment lease rates were down 0.3% and for villas they were down 2.4%. But apartment sales were up 0.6% year on year while villas fell 57%.
This article was republished with permission from Property Wire.