Dubai’s real estate sector is seeing declines in new buyer enquiries and transaction numbers over the past three months leading up to December. The declines are attributed to weak investor sentiment and muted market conditions, according to the latest Emirates NBD Dubai Real Estate tracker.
The drop in new buyer enquiries was the sharpest since the survey began in April, the release said. The outlook for 2016 isn’t looking much better either, with 47 percent of real estate agents expecting a fall in Dubai property values over the course of 2016 and only 32 percent forecasting a rise.
Fifty-five percent of real estate agents polled for the survey have already reported a fall in average sold prices, but the good news for developers is that the latest reading signalled the slowest pace of declines since June. Transaction volumes were also reported to have dropped at a slower pace.
CBRE, the real estate consultancy, expects prices to drop by ten percent in the Dubai residential segment in 2016, but it has said that the trend will be fragmented.
According to CBRE, 2015 saw a zero percent year-on-year increase in the rents of commercial and residential properties and this is expected to continue as the Emirates NBD survey indicates weaker trends on lettings with the slowest rise in newly agreed rental prices in the survey’s short history.
“The survey is consistent with recent data on residential sales and lettings prices in Dubai, which show prices continuing to ease. However, the momentum of price decline has moderated in December. The strong USD and low oil prices are likely to remain headwinds for the real estate sector in 2016,” said Khatija Haque, Head of MENA Research at Emirates NBD.
Dubai households, though, remain “overwhelmingly optimistic about property values over the course of 2016”, with two-thirds anticipating a rise in their property value during the next 12 months.
Emirates NBD also released its Dubai economy tracker, which showed that the expansion of Dubai’s private sector in December was the softest in 5.5 years. The headline number came in at 51.8 in December, down from 53.4 in November, the weakest rate of improvement since July 2010.
This article first appeared on AMEinfo’s sister publication TRENDS