Dubai: With Dubai’s home rent declines being extremely selective in terms of location, the city’s tenants could do with some help from speculators.
According to a new report on Dubai realty by Deloitte, the global consultancy, “rental price decline could be exacerbated further if speculative investors who are unable to sell product for a satisfactory return instead decide to release units for rent”.
But for that to happen in a way that is decisive, the pace of handover of completed properties should rise a notch or two. But going by available evidence that is unlikely to happen, or at least in the short term. “Consultations with key developers suggest that a more realistic number (for handovers) will be approximately 10,000 units (this year),” according to the report.
“Our real estate advisory team issued a Real Estate Predictions Report in January 2016, which looked at trends and prospects for Dubai’s real estate market. Now that we have moved into the second half of 2016, we have compared the predictions that we made for Dubai’s residential, hospitality, office and retail markets with actual trends in the first half of 2016.” stated Robin Williamson, Managing Director, Deloitte Corporate Finance Limited, Middle East.
Deloitte has predicted that average residential sale prices in Dubai would continue to fall in 2016, reflecting a transition to a more mature market, as well as an increase in more affordable stock and discounting in emerging locations. Data for the first six months of 2016 shows that residential sale prices have continued to decline in Dubai. Prices for Palm Jumeirah apartments declined by 3.8 per cent between January 2016 and June 2016, while prices for Downtown apartments declined by 1.8 per cent over the same period. Year on year data indicates that overall, residential sales prices in Dubai declined by 3.8 per cent between June 2015 and June 2016.