Slowdown or a healthy softening?

Dubai real estate sector is experiencing a decline in transactions and property prices.  An overall slowdown is apparent and is most likely to stay for sometime as in the current situation it’s difficult to predict when the market will start recovering and prices, investor sentiment and inquiries will start shooting upwards. The drop in global oil prices are making oil based economies to struggle with the deficit created by the low prices. Dubai real estate is an investor driven market and at this time investors have attained a wait and watch attitude, however there are investors who see opportunities in the market but the number is relatively small. According to a recent survey 47 percent of Dubai real estate brokers expect the easing of sales price to continue in 2016 .

The slowdown in property transactions and the decline in sales prices is also believed to the bottoming as in the real estate cycle the next phase after the slowdown is recovery.

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Experts believe that the market is getting used to the low prices and this trend will continue for some time and then slowly move towards the crest.  One positive attraction for investors is the high rental yields, rental prices have shown no or negligible drop in the last few months and for investors this is a good point to consider as they can still get high rental returns while paying a lesser price to buy the property. Some developers are also creating flexible payment plans to attract mid income buyers, this is a good move as this opens a new and untapped market as this segment of buyer is so far missing from the property scene. Creating local demand can keep the market activity on and any new inventory will be absorbed keeping the balance between supply and demand at par and keep sustainable growth. Developers are positive about the absorption of the new inventory that is being released, they believe that there is enough buyers for the new properties and also the actual number of new units to be released in the market has been exaggerated.

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