Wednesday, 15 April 2015

Dubai Real Estate market in a mode of correction

The Real Estate market in Dubai has started showing signs of a slowdown following internal and external factors. The average sale price for apartments in Dubai slumped 2 percent compared to a 1 percent in the last quarter, villa prices also lowered by a small margin of 1 percent. This is a sign of market softening as new unites were released that boos.ted supply of apartments. Rents for both apartments and villas however showed no change and remained stagnant, compared to a y- o-y basis the average price of Dubai apartments increased by 9 percent and a two percent for villas. This is the first time since 2008 that sales prices have fallen. Now as Dubai's real estate market has entered into a mode of correction, developers are now targeting middle income earners and believe these kinds of projects will keep the market going. 

Recently Dubai municipality announced to introduce properties that would suit the budget of middle income workers. These projects will be built at various locations across the city. This news already has spread a wave of excitement among people who fall in the middle income range in Dubai. There are an estimated 22,000 units to be released in this year which will give a boost to supply and eventually lowering sales prices, while some developers believe that there will be no significant drop in the sales prices in 2015 as people have been and will be attracted to the UAE so increase in the population will keep absorbing the inventory, also the growth in economy is creating newer opportunities for skilled people and businesses thus resulting in keeping the demand at par with the supply. The developers are confident about the new projects in pipeline and new projects being announced. Developers are coming up with new incentives for buyers and easy payment plans will attract people to buy a house than rent.

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