Dubai house prices forecast to fall by up to 10% in 2015

Dubai house prices will fall by up to 10 percent in 2015 after rising almost 60 percent in two years, with the emirate’s robust economy helping it avoid a repeat of a crash in 2008-9 despite a slump in oil prices, property consultants JLL said on Tuesday.

Dubai house prices forecast to fall by up to 10% in 2015

Dubai house prices will fall by up to 10 percent in 2015 after rising almost 60 percent in two years, with the emirate’s robust economy helping it avoid a repeat of a crash in 2008-9 despite a slump in oil prices, property consultants JLL said on Tuesday.

The real estate sector in Dubai, one of seven emirates in the United Arab Emirates (UAE), has been among the most volatile globally over the past decade as it turned from boom to bust to boom again.

Jones Lang Lasalle (JLL) estimates house prices rose 56 percent in the two years to June 2014, but have since stabilised and now face a relatively minor correction this year.

“This time we think it will be more of a measured downturn,” Craig Plumb, JLL head of research for the Middle East and North Africa, told a news conference.

He forecast Dubai house prices on average will decline by up to 10 percent in 2015. Rents will fall in parallel.

About 25,000 residential properties will be ready in 2015, equivalent to about 7 percent of Dubai’s present housing stock.

“It’s manageable – with the population and incomes growing you’d expect to absorb (that),” said Plumb. “It’s not supply that’s causing the correction, it’s more that prices got a bit too high.”

Dubai’s economy likely grew about 4.5 percent in 2014 and growth will rise above that level in the coming years, a senior government official said in December.

The UAE is a major oil exporter, but Dubai itself is a negligible producer, and JLL said the slump in crude prices would have scant direct impact on the emirate’s property sector, at least for now.

But Dubai’s stock market slump — the index has fallen 30 percent from June’s 2014 high — would have dented investors’ confidence, Plumb said.

The oil price fall has coincided with the dollar strengthening against major currencies. The UAE dirham is pegged to the greenback, so Dubai has become more expensive for many foreign visitors and investors.

“That could have a small impact on the make-up of foreign property buyers in the UAE, but the bigger picture won’t change,” Plumb said.

Buyers from India, Britain and Pakistan were the biggest purchasers of Dubai property last year, official data shows.

Source:arabianbusiness.com

Nurullah KIRMACI / emlakcoulisse.com

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