Prices still falling in Dubai, but at a slower rate, latest monthly index shows
Falling real estate prices in Dubai seem to be moderating as the latest house index shows that villa values fell 0.14% in August compared to a 1.19% drop in July.
The REIDIN figures, regarded as the most reliable in the emirate, show that there was a slight decline in both apartment and villa prices last month.
Overall prices dropped 1.98% month on month. Apartment prices dropped 2.56%. Apartments over 151 square meters rose by a 2.15% during August while those in the 50 square meter and less category were lower by a nominal 0.12%.
In the 51 to 100 square metre segment, the average nominal price fell 1.07% year on year while on a month on month basis, prices spiked by a nominal 1.38% during August 2010.
The index also shows that in the 101 to 150 square metre segment, the average nominal price decreased 3.71% year on year in August 2010, while the month on month price fell by 1.43%.
Though year on year prices in the 151 square meter and above category were down by 5.74%, the month on month prices rose by a nominal 2.15% in August 2010.
Meanwhile the Dubai Chamber of Commerce and Industry said it believes that property prices and rents are expected to fall further in the short term.
‘Demand supply dynamics are heavily tilted towards oversupply due the significant size of construction projects over the years. Due to lower confidence in the real estate sector and subdued demand, the prices and rents could dip further,’ said Ehsan Khoman, economic researcher at the Dubai Chamber.
Part of the problem is that the real estate market has focused on high and ultra high end of the market segment, he explained but added that in the medium term rental yields and property prices are expected to stabilise as growing confidence shows signs of a recovery.
Even predicts that prices could soar to the pre-crisis level as anti-speculation and other measures boost investor confidence and revive overall demand in the market.
Among moves being considered are residency visas linked to property ownership for foreign nationals.