Experts are predicting residential real estate prices in Dubai will decline by another 5 to 10 percent as the market heads downward. The news accentuates an already dismal market since the predicted fall is on top of the 10 percent decline Dubai experienced in 2018.
Burgeoning inventory and a softening of oil prices have hit the market hard over the last months, and 2019 will see the handover of real estate projects announced at the onset of the Expo 2020 bid.
On a positive note, demand is expected to pick up once the Expo kicks off in 2020. Dubai is still considered an investor-friendly market, with good yields and a somewhat stable permanent residence base. But the commercial market is still weighted down by the high costs of transactions. The Middle East CEO of Savills (SVS.L), Steve Morgan told Reuters on Monday:
"While the latest fall in house prices has not come close to the more than 50 percent plunge seen in 2009-2010, which pushed Dubai itself close to a debt default, residential prices fell by 6 to 10 percent in 2018."
The United Arab Emirates overall is experiencing its latest real estate slump to match other parts of the Middle East. The slump, according to most experts, is primarily due to oversupply, with a strong dollar and lower oil prices coming in as other key factors.
Morgan also said he is confidence Dubai is heading towards the bottom of its property market downturn, although cautioned he had thought the market touched bottom a year earlier.
S&P Global Ratings’ analysts predicted last year the market could decline by 10 to 15 percent in 2018 and 2019 before stabilizing in 2020. Expo 2020 is a World Expo to be hosted by Dubai in the United Arab Emirates, opening on October 20, of that year. The event main site will be a 438-hectare area (1083 acres) located between Dubai and Abu Dhabi