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Dubai: Investors looking to acquire a piece of property in Dubai are likely to have more affordable options as house prices are expected to soften further this year.
In its Real Estate predictions report, Deloitte said the residential sales prices in Dubai look set to soften by a further 1 per cent to 5 per cent and stabilize thereafter.
“Affordability will become increasingly important for purchasers and government alike,” the report said.
Deloitte’s report offers an in-depth look at Dubai’s economy and provides outlooks for 2015.
Analysis of data showed that the residential market in Dubai posted a strong growth in the early part of 2014, but the volume of residential transactions, as well as the sales price growth, remained flat towards the end of the year.
Residential sales transactions dropped significantly by 28 per cent, from 17,493 in 2013 to only 12,515 last year. Between September and December 2014, in particular, monthly transaction volumes dropped significantly, averaging 828 per month, compared to 1,700 during the same period in 2013.
“Dubai’s property market has experienced another year of change, with a leveling off in capital growth, in certain areas, towards the end of the calendar year,” said Robin Williamson, managing director, Deloitte Corporate Finance Limited.
“While possibly not welcomed by traders and speculators, this new characteristic suggests a market that is in fact maturing and arguably strengthening.”
According to analysts at Deloitte, certain areas in Dubai, such as International City and Sports City, where more amenities are expected to be developed, will remain popular to both nationals and expatriates.
More foreign investors will continue to seek property investments in Dubai, but the volume of deals may be impacted by events in other residential markets outside the UAE, including the increasing stability in Egypt and the financial and political issues affecting Russia.
The prevalence of pre-sales activity in Dubai will continue this year, particularly for known developers. Real estate developers that are lesser known, including landowners, will compete with more creative delivery vehicles, incentives and payment plans, to capitalize on pre-sales.
Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com