Cluttons’ 5^th annual UAE Property Market report indicates values across Dubai’s residential investment areas continued to moderate during Q2 2017, dipping by an average of 1.5%. This leaves the annual rate of change at -5.8% and marks the 12^th consecutive quarter of price declines, during which time prices have moderated by 14%. Apartments continue to fare better than villas, with prices decreasing by an average of 1% during Q2, compared to a 2.2% drop in villa values. 

At a glance:

• Dubai’s residential investment values dipped an average 1.5% in Q2
• Apartment prices decreased by 1%, and villa prices dropped by 2.2% for the same period
• Prices have had a soft correction, and seem to have bottomed out, according to Cluttons
• Rental market forecasted to end the year 5% to 7% lower than 2016
• Villa rents expected to end the year 10% down on 2016
• Apartment rents remain unchanged
• Average annual villa rents in Dubai stand at just over AED 245,000 per annum 
• Apartment rents come in at just over AED 100,000 per annum 

Click here to access and download the full Cluttons report​.

Prices have continued to fall, but soft correction in the market appears to be nearing an end, with many locations starting to show signs of bottoming out, as previously reported by Cluttons. During the first six months of 2017, just seven of the 32 submarkets tracked in the emirate registered price falls, with all other locations seeing no change in values.

In the rental market, Cluttons expects continued moderation during 2017. The consultancy forecasts rents to end the year 5% to 7% lower than 2016, but like the sales market, there is growing potential for a more stable picture to emerge, as the Expo effect starts to filter through. Villa rents are expected to end the year 10% down on 2016, while apartments are expected to demonstrate greater stability, with virtually no change in average rates when compared to 2016.

Murray Strang, head of Cluttons Dubai, said: “Our view is that the rental market’s fortunes remain tied to the looming Expo 2020. At this stage, the mega event is one of the primary upside risks to our outlook, especially as we expect it to drive up the rate of job creation and tenant demand, but this is not expected for another one to two quarters at least.”

Speaking on the performance of more prime locations, Strang commented: “DIFC continues to be the stand out performer with rents remaining the priciest in the city. While it has already stamped its authority as the region’s foremost financial business hub, the planned addition of further Grade A stock, such as Emirates Towers Business Park, will intensify demand and help transition the financial centre from a regional hub to a global one.”

For more information, including more detailed graphs and commentary, click here to access and download the Cluttons report.

If you would like to contact the authors for additional information, email Faisal Durrani or Murray Strang from Cluttons via the contact details below.

See also:

Dubai's 2050 goal: Be the world’s most sustainable city

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Dubai reveals top 10 nationalities that invested AED151 billion in real estate