House prices in Dubai fell by nearly 10 per cent on an annual basis in August, prompting brokers to revise their full year forecasts.
According to the property data company Reidin, this was split between apartment prices, which on average fell 10.4 per cent over the year, and villa prices which dipped 8 per cent over the same period.
Average house values in Dubai have been sinking since the start of the year, when the property broker JLL predicted that prices would fall by about a tenth.
Since then the broker has revised its forecast for the full year, expecting average house price falls of around 15 per cent for 2015.
“The volume of sales has fallen by more than we expected,” said Craig Plumb, the head of research in JLL’s Dubai office. “There is still no sign of a pickup in activity in the market place and so the falls have been more than we anticipated.”
He added that he expected prices to continue to fall next year.
At the start of the year the ratings agency Standard & Poor’s predicted that house prices could fall by as much as 20 per cent in 2015 because of increased supply and weakening investor sentiment triggered by low oil prices.
Dubai property prices are notoriously volatile, doubling in the 2000s boom then crashing by more than 40 per cent after the global financial crisis before then rocketing up again afterwards.
In this context, JLL was quick to play down the significance of its revision.
“Although the numbers are slightly greater than we expected, we still believe that this is a relatively modest soft landing for Dubai property,” Mr Plumb added.
Reidin, whose data is used by many of the big agencies including CBRE and JLL, gets its figures from achieved house price data provided by property broker clients and government sources such as the Dubai Land Department, asking price data from property listings, and data collected by its own team of researchers that goes out to between 10 and 20 buildings a day.
The company reported that average Dubai property prices fell 0.75 per cent in the month of August, with apartment prices down 0.55 per cent month-on- month and villas down 1.45 per cent over the same period.
But although house prices in the emirate fell, rents were stabler. According to Reidin data, housing rents in the emirate fell 1.4 per cent in the year to the end of August and actually rose 0.76 per cent month-on-month.
Villa rents fell 2.9 per cent over the year and were down 0.61 per cent compared with the previous month. And apartment rents in the city remained roughly static, rising 1 per cent over the month but equating to a 1.1 per cent fall year-on-year.
Reidin reported the same trends in the Abu Dhabi market, although it said that they were far less pronounced in the capital.
It said that average property prices in Abu Dhabi fell 3 per cent over the year to the end of August, while rents increased 0.5 per cent over the same period.
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