Residential rental and sales rates continue to fall across Dubai but performances are highly fragmented by location, according to the Q2 2016 Dubai MarketView by global real estate consultancy firm CBRE.
While Dubais economy has continued to outperform its neighbours thanks to its diversified economic base, the devaluation of major currencies against the US dollar has impacted investor sentiment in the Emirates real estate market.
Residential property prices fell for the sixth consecutive quarter during Q2 2016, with average sales rates falling by 2 percent on the previous quarter and 12 percent compared to same second quarter of 2015.
Higher-end residences witnessed the most significant drops during this time while prices within the mid-market segment have proven to be far more resilient, reflecting the current demand for affordable accommodation in freehold communities, the report said.
That said, the mid-market segment has also witnessed some downward rental pressures in affordable leasehold locations, including Al Barsha, Oud Metha and Bur Dubai, while freehold sub-markets such as International City have also suffered more marked downturns in performance quarter-on- quarter, reflecting the higher availability of units on the market at this time.
Sales rates have been predicted to drop further by an additional 3-5 percent in the coming quarters although some locations may vary. During the quarter, average residential rental rates have declined by around 1 percent and 2 percent year-on- year.
Mat Green, Head of Research & Consulting UAE, CBRE Middle East, said: It is estimated that around 48,000 new residential units (apartments and villas) could enter the Dubai market during the period 2016 to 2018, provided that construction delays are minimal.