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Average Dubai property prices slump 2% in past 3 months

Average residential rental and sales rates continued to decline across Dubai during the second quarter of 2016, but performances are highly fragmented by location, according to CBRE.

Its Q2 2016 Dubai MarketView said the devaluation of major currencies against the US dollar, spurred by global economic uncertainty, has impacted investor sentiment in the emirate's real estate market.

The report said Dubai's residential prices fell for the sixth consecutive quarter during Q2, with average sales rates falling by 2 percent quarter-on-quarter, resulting in a 12 percent decline year-on-year.

It added that higher-end residences witnessed the most significant drops during this time.

According to the Dubai MarketView, prices within the mid-market segment have proven to be far more resilient to this downward rate trend, reflecting the current demand for affordable accommodation in freehold communities.

That said, the mid-market segment has also witnessed some downward rental pressures in affordable leasehold locations, including Al Barsha, Oud Metha and Bur Dubai, while freehold sub-markets such as International City have also suffered more marked downturns in performance quarter-on-quarter.

Sales rates have been predicted to drop further by an additional 3-5 percent in the coming quarters although some locations may vary, CBRE said. During Q2, average residential rental rates declined by around 1-2 percent year-on-year.

Mat Green, head of Research & Consulting UAE, CBRE Middle East, said: "It is estimated that around 48,000 new residential units (apartments and villas) could enter the Dubai market during the period 2016 to 2018, provided that construction delays are at a minimal."

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