Dubai house prices to get cheaper

dubai — There is potential for residential real estate prices in Dubai to decline by another 5 to 10 per cent this year before the market hits the bottom, said Steve Morgan, CEO of Savills Middle East.

This is on top of the 6 to 10 per cent decline Dubai residential property prices witnessed in 2018, the executive added.

“Real estate prices have slipped and with the strengthening of the US dollar, investors from traditional source markets such as Russia, India, UK and Europe are facing affordability issues. It’s not just real estate, but other sectors like tourism are also facing affordability issues. Real estate across the world, even in advanced markets, goes through cycles,” Morgan told Khaleej Times on Monday. Residential rents are expected to soften further but at a slower rate in Dubai, according to Haider Tuaima, head of real estate research at ValuStrat. “There will be increasingly affordable rents, particularly for townhouses and small villas,” Tuaima added.

Supply of additional inventory is also weighing on the Dubai housing market. 2019 will see the handover of projects that were announced when Dubai won the Expo 2020 bid. This also coincides with the softening in oil prices. But, demand is expected to pick up once the Expo kicks off in 2020.

He requested the government to do more to bring down the cost of transactions. “There are steps in the right direction such as the long-term visas, property visa for retirees and spurt of payment plans for off-plan properties. The real estate sector will also benefit if Dubai manages to attract more visitors who transit through its airports,” he reckoned.

Meanwhile, Morgan affirmed that Dubai is still an investorfriendly market. “There are good yields to be had if you buy at the right price in the right project.”

Referring to the marginal impact of VAT on the commercial property market, Morgan said: “The cost of operating a business is still high in the UAE. The cost to apply for or renew a trade licence, visa, etc., is rising every year. VAT is an additional cost for these businesses.”

Savills announced the rebrand of its Middle East business following the acquisition of Cluttons Middle East on May 31, 2018. The firm has completed a sixmonth integration process with Cluttons Middle East.

There are good yields to be had if you buy at the right price in the right project

Steve Morgan, CEO of Savills Middle East