Dubai property prices not bottoming out 'anytime soon'
The project pipeline and supply/demand imbalance in the market make price reductions unlikely, Chestertons said
The bottoming out of Dubai property prices will not happen anytime soon given the large pipeline of construction projects and the imbalance between supply and demand, a Dubai-based real estate firm told Construction Week.
Speaking at Cityscape Global 2018, Ivana Vucinic, head of consulting and head of valuations and advisory operations at Chestertons, said: “With all the units in the pipeline now that are supposed to be delivered, I just can’t see the prices bottoming out any time soon.
“Everyone is hoping it will be this year or next year, with prices then going up as we get closer to [Expo 2020 Dubai],” she added, speaking on the sidelines of the property exhibition opened by HH Sheikh Hamdan bin Mohammed Al Maktoum, Crown Prince of Dubai.
“For example if there are more initiatives that boost the population and boost investor interest, then we could get to that equilibrium at some point, where prices will bottom down and then start going up. But I just can’t see that happening any time soon – we have 70,000 units in the pipeline set to be delivered before Expo 2020.”
Recent initiatives that could attract investors in the UAE include the new long-term visa, announced last month, which is aimed at incentivising expat retirees aged 55 and older to stay in the country.
To qualify for the new visa, applicants will have to own an investment in property worth $544,510 (AED2m); have financial savings worth no less than $272,255 (AED1m); or have an active income no less than $5,445 (AED20,000) per month.
Vucinic’s comments echo those of Mark Andrews, managing director at Laing O’Rourke Middle East.
While he welcomed efforts like the expat visa, he too said the large supply and demand imbalance in the UAE’s property market was still large.
“It won’t have a huge immediate impact on the demand side for residential property,” he told Construction Week last month.