The price of Dubai's villas and townhouses has remained relatively stable, while subdued consumer spending, as a result of slower job growth and correction of salaries in Q1 2019, has impacted retail and office sectors across the UAE, according to Cavendish Maxwell.

The property consultancy released its Q1 2019 UAE Property Market Report last month, revealing several key insights and trends in local real estate markets. 

According to the data,  the price of villas/townhouses remained relatively stable at an average of AED 1.8 million, while apartment prices traded around AED 1.2 million on average.

In the same period, Abu Dhabi’s major investment zones witnessed an average price drop of 9.6% for apartments and 10% for villas/townhouses.

Vacancy levels in malls rose in some emirates, while new supply is expected to continue to put downward pressure on rents. New office space, particularly in Dubai and Abu Dhabi, once delivered in 2019, is also expected to impact rents.

However, demand for Grade A fitted offices continued to be high in Q1 2019.

Head of Strategic Consulting and Research at Cavendish Maxwell, Manika Dhama, said the overall performance of the UAE’s real estate market remained subdued during Q1 2019.

"With a marked slowdown in 2018, the government has been swift in introducing measures including increased spending, new regulations and revised policies to raise investor sentiment," she said.

"However, with more supply expected to be added throughout 2019 – and we have already seen a substantial number of units handed over in Q1 – we expect prices and rents for residential units to continue to decline amid soft demand.”

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