Exposure to global events a key obstacle

As the residential market heads towards a “soft landing”, Dubai will have to deal with various external variables that could continue to affect real estate values, according to a report by Knight Frank. In the wake of oil price volatility and negative investor sentiment, the report states that Dubai’s resilience will drive the property market to the next growth cycle.

The report also states that sale prices are becoming more realistic and developers are adopting a more mature approach to their project launches, releasing projects in line with demand.

“Dubai’s position as a leading financial hub and competitive tourist destination leaves it exposed and vulnerable to global events,” said Dana Salbak, Associate Partner and Head of Research at Knight Frank Middle East. “Further volatility in oil prices, elections in the US and across states in the Euro zone, and ongoing geopolitical tensions are likely to impact the behaviour of markets, currencies and investor sentiment. This in turn will reflect on the demand for property in Dubai.”

The report expects the residential market to level out by the end of the year before seeing gradual recovery next year. This is further supported by ongoing government spending on key projects geared towards the World Expo 2020.

“While we have seen a slowdown in demand for residential property in Dubai over the past 18 months, the appetite remains healthy and is expected to rebound over the next couple of years as investors regain their confidence,” said Salbak.

Property Weekly


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