Trying to forecast the real estate trends in Dubai is always a challenge, especially with the industry affected heavily by other economic situations, such as the slump in oil prices, a strong US dollar or the economy in China or Russia. Many people are worried that 2016 is going to be a tough year economically, but what does it hold for the real estate industry?
As with any market forecast, there is good news and bad news. The good news is, it’s a great time to be a buyer; the bad news is for those who already own, as a fall in house prices is expected.
Buying a property
Now it really is a buyer’s market, with house prices set to get even lower throughout the rest of 2016. According to a survey carried out at the end of 2015 by Deloitte, the average residential property price dropped 10% in 2015, with a further decrease expected this year. This is fantastic news for those looking to buy in Dubai, with many estate agents advising clients to hang off a little longer before they buy anywhere, hoping they will grab an even better bargain.
Already an owner
The property market in Dubai has always had its ups and downs. For owners, the slump in prices in 2016 just means one thing; don’t sell your house until the slump turns around. Those who desperately need to sell their houses will have to accept they will be selling for a lower price compared to a couple of years ago, but if owners can hold off for another year or so for the prices to start increasing again, they will be better off.
Looking to rent
As property prices decrease, so do rental prices. Although many popular communities around Dubai, such as Dubai Marina or Downtown Dubai, have not yet seen a decrease in rental prices, it is evident that prices have indeed stabilized. After an increase in rental prices in 2013 and 2014, 2015 saw a slowing down and the same is expected for this year. This is welcomed good news for renters in the city, as fears were arising over the steep incline in rental prices compared to salaries.
Overall, 2016 will be quite similar to 2015 for the property industry in Dubai. Although prices are slowing and even decreasing, as the Expo2020 gets closer, the city is expected to boom, with property being one of the main investments to be had in the city.