Real estate prices in Dubai will continue declining in 2017 with a recovery only starting late next year, property consultancy Cluttons said.
Home values in the emirate dropped 7.4 percent on an annual basis at the end of the third quarter and will probably slip another 5 percent next year, Cluttons head of research Faisal Durrani said in an interview today in Dubai. Prices have been falling since 2014 and are almost 27 percent lower than their peak in the third quarter of 2008, he said. Prices will only begin to stabilize in the last three months of next year, driven by government spending on projects related to Dubai’s hosting of the World Expo in 2020.
Real estate sales in the emirate fell almost 30 percent by value in the first seven months of the year, according to data from the Dubai Land Department, as a slump in oil prices led to an economic slowdown in Gulf countries. Cluttons joins other real estate analysts forecasting either a flat market or further slowdown in 2017. Jesse Downs, managing director at consultant Phidar Advisory, predicts a 10 percent drop after a 7 percent slide this year.
“Government spending on projects related to the Expo 2020 will help create jobs and stimulate demand, but the impact of that will not start to be felt for another six to nine months,” Durrani said. “In the meantime, stubborn sellers at the top end of the market who had been holding out over the past 12 months are now facing reality.”
To contact the reporter on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net. To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Claudia Maedler
©2016 Bloomberg L.P.
