Dubai property market shows signs of stability

Tuesday May 17 2011

There are signs of stability in Dubai property market despite a modest fall in sale prices in the emirate, according to a sales guide.

Property prices are likely to continue declining trend, but last quarter results show stability in the market, according to the leading real estate consultancy companies in the Mideast. Sale prices are likely to continue declining in the first quarter of 2011, particularly for medium and low quality units, due to the ongoing demand for high quality, the property consultancy firm said in its January sales guide.

The consultancy company believes that the property market has not yet fully bottomed out and the declining trend will continue. `While we are no longer seeing the same sorts of declines in sales prices that initially occurred post 2008, this is not to say that the market has fully bottomed out yet. It is our belief that prices will continue to fall for a while. However, the relatively shallow declines seen in the last quarter represent something of a boost for the property market in the emirate,` the property experts said.

Findings since August 2010 indicate that poor quality units have been the worst performing asset: `While price declines have also affected more attractive, better quality units, it is certainly not to the same extent,` said real estate representative. `For instance, during Q410 prices for lower quality units in Dubai Marina fell up to 10 per cent, whereas higher quality units in the same area saw little or no decline.`

Apartment prices fell more consistently across Dubai, with quality seemingly the defining factor: `Apartments are more susceptible to price declines dependent on quality, with greater supply leading to greater choice for prospective buyers. This is further exacerbated by that fact that there are considerably more apartments than villas coming online in the near future, increasing the already existing oversupply and continuing to bring prices down,` the expert added.