Almost half – 47 per cent – of real estate agents in Dubai expect property prices to reduce further in 2016, a new survey has found.
The quarterly real estate tracker released by Emirates NBD and Markit found that the uncertain economic outlook has “acted as a brake on investor demand”.
Although 32 per cent of the respondents anticipate prices to increase this year, most agents generally noted that market conditions would favour buyers over the next 12 months, as construction volumes look set to remain strong.
Dubai’s residential property market softened substantially last year, with sales prices anticipated to have dropped by 10 per cent in 2015.
The survey found that new buyer enquiries and transaction volumes decreased sharply in the three months to December.
The drop in new buyer enquiries was the sharpest since the survey began in April, which real estate agents linked to weaker investor sentiment and muted underlying market conditions.
However, agents indicated softer falls in property values for apartments and villas in December. Transaction volumes were also reported to have dropped at a slower pace.
Head of Middle East and North Africa Research at Emirates NBD Khatija Haque said: “The survey is consistent with recent data on residential sales and lettings prices in Dubai, which show prices continuing to ease. However, the momentum of price decline has moderated in December. The strong USD and low oil prices are likely to remain headwinds for the real estate sector in 2016.”
A report released by the Dubai Land Department earlier this week noted that real estate transactions in the emirate rose by 8 per cent in 2015 to reach Dhs 267bn. Sales for the year crossed the 48,000 mark with a combined value of Dhs 130bn, it said.