The majority of agents in Dubai expect residential property prices and rents to decline by up to 5 per cent in the final quarter of the year, according to a new report.
The survey by property consultancy Cavendish Maxwell comes after Dubai Land Department figures showed the value of property transactions declined more than 20 per cent in the first nine months of the year.
Despite the outlook, the majority of agents also expect transaction activity to improve over the next quarter and “buyer enquiries, seller instructions and agreed sales will be higher than those in Q3”, according to the firm.
In the third quarter, Cavendish said sales prices for apartments declined 1.3 per cent and villa 1.4 per cent.
Rental declines averaged a similar 1.3 per cent and were most pronounced in Dubailand, The Greens in Emirates Living, Motor City, Arabian Ranches and Victory Heights – all down by 7 per cent year-on-year.
Off-plan transfers accounted for 53 per cent of residential apartment sales during the third quarter led by Business Bay, Mohammed bin Rashid City and Jumeirah Village Circle.
Secondary market sales accounted for 31 per cent led by International City, Dubai Marina, Jumeirah Village Circle.
For villas, the secondary market accounted for the majority of transfers, led by Emirates Living, Arabian Ranches and Mudon.
Chestertons said it expected new supply in the next six months to be focussed in Business Bay, Jumeirah Village Circle, Dubai Sports City, Dubai Silicon Oasis and Town Square. The company indicated 72 per cent of upcoming units would be handed over in the fourth quarter.
“Increasing handovers will continue to impact rents in most locations across Dubai as tenants have more choice. This will also impact occupancies in existing stock and should be factored into net yield estimations for the forthcoming period,” Cavendish Maxwell said.
In a separate Q3 report released earlier this month, consultancy Chestertons said average sales prices for apartments and villas declined 6 per cent from the previous quarter.
The company said it expected the Dubai property market correction, which began more than two years ago, to continue for the next three to five years.