Speculative buying is raising its presence again in Dubai

DUBAI

The word “speculation” is again being raised in talk surrounding Dubai property sales.

Off-plan properties remain “favourable among investors, underlining the speculative nature of the local market,” said Mat Green, Head of Research & Consulting UAE, CBRE Middle East. “Around 30,000 new units are anticipated to complete this year and we expect to see increasing pressures for the off-plan sector and the wider market, particularly with the recent introduction of VAT [value-added tax].”

Off-plan sales accounted for more than 65 per cent of total transactions last year, an increase of around 56 per cent in the number of transactions and 44 per cent in terms of total value compared to 2016.

Residential sales prices, which started to go into decline during 2015, could also be in recovery mode. The rate of decline for the fourth quarter of 2017 has “actually been negligible, at just 0.5 per cent from the last quarter”.

According to CBRE, over 90,000 new homes could enter the market during the period 2018 to 2020, of course dependent on whether construction delays happen or not.