Sales of residential property in Dubai fell by 24 percent in the third quarter, according to international property agency, Chestertons MENA.
There were AED 3.45bn ($939mn) worth of residential sales transactions during that period, down 29 percent on the previous quarter with the most popular area, Dubai Marina accounting for sales of AED 654mn.
Robin Teh, Country Manager UAE & Valuations & Advisory Director, MENA, said: Dubai Marina will always be an attractive location for investors with consistently high levels of yields.
The highest transaction values remained in the prime areas such as Emirates Living, Palm Jumeirah and Downtown Dubai.
However, as investors bide their time on the bottoming of the Dubai market, total transaction volume and values dropped in the last quarter, compounded by the traditional lull in activity due to the summer and holiday season.
In the office market, total transactions decreased by 20 percent to AED389mn. Volumes of sale transactions values in Q3 also fell by approximately 24 percent compared to Q2, with the majority of sale transactions in Business Bay followed by JLT.
Sales prices in both villa and apartment sectors fell by around 1 percent during the last quarter, with apartments in Business Bay (AED 1 ,350 per sqft), Discovery Gardens (AED 850 per sqft), International City (AED 695 per sqft) and The Views (AED 1,470 per sqft) witnessing the greatest drop; while prices in Dubai Motor City, JLT and Remraam remained unchanged.
High end properties on the Palm, those over AED 2,200/sq. ft. were the only villas from the sample measured to hold their value.
Teh said: We expect prices to remain at stable levels leading up to the end of 2016.
It was a similar story in the rental market, with a 1 percent decline in both apartments and villas across all unit types.
Average one bedroom apartments in Remraam fell to AED 57,000 per annum. However, two bedroom apartments in select locations saw drops of up to 2% such as Downtown Dubai, JLT and the Greens.
The average rents for three bedroom apartments in DIFC, Downtown Dubai and Dubai Marina remained the same in all cases.
In terms of villas, Arabian Ranches saw the greatest drop, with an average 4 bedroom now renting at AED 245,000 per annum. While villas on the Palm, JVT and The Springs remained consistent quarter on quarter.
Teh said: Demand remains relatively stable, with tenants having more negotiating power in the current market. Job losses and lower spending capacity have placed pressure on rates in Q2 and Q3 2016.
Despite the relatively flat performance for the emirate during Q3, gross yields across all areas of Dubai remained stable, both the apartments and villas segments.
Apartment gross yields are between 6 percent and 8 percent, while mid-market communities International City and Discovery Gardens gross yields reach 9 percent and 10 percent respectively, said Teh.
Villa gross yields are still in the range of 4 percent to 6 percent with gross yields in prime areas such as Palm Jumeirah and Jumeirah Islands standing approximately at a more modest 3 percent, he added.