Residential sales price in Dubai fall 10pc

DUBAI: Average residential sales prices across Dubai declined by approximately 10 per cent in 2015, says Deloitte in a report. In 2016, average residential prices are tipped to decrease further. However, while there may be a softening in residential rents in some sub markets, this softening won't be to the same degree of declines in residential sales prices, says Deloitte's ' Real Estate Predictions' report for Dubai. Deloitte has predicted that although some 40,000 units are estimated to get delivered in 2016, consultations with key developers suggest a more realistic number will be approximately 10,000 units. "Over the past 13 years, Dubai has experienced development on a scale and to a standard like no other real estate market globally. Along with other regional and international markets, it has suffered the effects of the global financial crisis," says Robin Williamson, managing director, Deloitte Corporate Finance Limited. "Today, it is maturing and feeling the effects of various market drivers while demonstrating strong resilience in certain sectors."

The report reveals that despite headwinds, Dubai's real estate market offers some potentially good prospects in 2016. "Despite the decline in average residential sales prices in Dubai during 2015, price growth over the last four years reflects a compound annual growth rate of 11.6 per cent, which outperforms other global cities such as London, Paris and Singapore," concludes Williamson. Meanwhile, the increase in competition among hotel operators in Dubai is resulting in reduced ADRs (average daily rates). Occupancy levels at around 70 per cent to 75 per cent are likely to represent the "new norm" in Dubai's hospitality market in 2016, compared to 77.5 per cent in 2015, the report says.