Higher quality villas are most likely to see stable prices, according to the January sales report from real estate consultancy Landmark Advisory. While an over supply is expected to keep apartment prices down.
‘Although we have not seen as steep a decline in sales prices as we have with lease prices, there have still been significant reductions and, what is more, this has happened ubiquitously throughout Dubai,’ said Jesse Downs, Landmark’s director of research and advisory services.
‘While price declines have also affected more attractive, better quality units, it is certainly not to the same extent. For instance, during the fourth quarter of 2010 prices for lower quality units in Dubai Marina fell up to 10%, whereas higher quality units in the same area saw little or no decline,’ she explained.
Downs also said that apartment prices had fallen consistently across Dubai, especially as this segment was particularly dependent on quality because of greater choice for prospective buyers.
Villa sale price performance was a function of location, with declines much more significant in Central Dubai, where, for instance, prices in The Springs and The Meadows fell by over 12%, the report indicates.
However, in other areas of Dubai there was little change. For example, four and five bedroom units in Victory Heights actually increased in price due to less supply available on the market. However, the majority of these prices drops occurred in the third quarter of 2010 with the fourth quarter being reasonably stable.
On the commercial property front, the Landmark research showed a continued focus on renting, although new supply in Jumeirah Lakes Towers (JLT) had seen standard quality office space values drop by as much as 30%.
‘While we are no longer seeing the same sorts of declines in sales prices that initially occurred post 2008, this is not to say that the market has fully bottomed out yet,’ Downs said.
‘It is our belief that prices will continue to fall for a while. However, the relatively shallow declines seen in the last quarter represent something of a boost for the property market in the emirate,’ she added.
