Rental and sales demand drops in Dubai
It seems interest for property in Dubai has started to slow, with CBRE reporting sales and rental demand falling by 1% in the first quarter of 2017. The last quarter of 2016 had been the market's strongest period, with speculators expecting this momentum would carry through to 2017.
Dubai, has in the past been a market slanted in favour of the landlord with rental rates on a constant rise. However, with demand falling across all property types, landlords will have to become more flexible and accommodating in an attempt to hold on to current tenants.
CBRE’s report stated: ‘The rate of rental deflation will be largely driven by the location specifics, primarily relating to the availability of supply and the impact of new housing deliveries on local demand.’
There is still a vast amount of off-plan property waiting to break ground, and developers seem unmoved by any potential lull in demand. This could be down to strong interest from overseas investors, who see Dubai as a good financial store.
It seems many investors are also attracted by the low entry levels created by payment plans. This allows buyers and investors a smaller initial down payment for securing a property, lower instalments and then a higher amount to pay on completion of the sale. Many feel this takes a significant risk out of some of the more ambitious off-plan developments.
Average rental prices stand at AED1,920 per square metre per annum, so it will be interesting to see where the average price finishes come the close of 2017.
