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Real estate sale prices drop in Dubai
Average sale prices in Dubai dropped ten per cent from Q1 to Q2 of this year, growing only six per cent.
July 22, 2014 4:27 by kippreport
By Florence Pilkington
Although the market is still standing strong, a recent report by Jones Lang LaSalle reveals that it is likely there will be further declines in the coming months.
“The market has maintained a positive performance since Q1 of 2014. We have seen prices increase in the residential sector, but there have been signs of a slow-down with villas in Dubai,” explains Dana Salbak, senior research analyst at Jones Lang LaSalle.
With villa sales in May 2014 dropping approximately 50 per cent, when compared with the same month in 2013, the cosmopolitan city’s reduced activity has come as quite a surprise, especially with the numerous new projects that have recently been announced.
“[All of the new projects announced in Dubai] will not cause immediate effect on the residential market, as most have completion dates post 2016/2017. Therefore, they will not be taken into account until they are completed,” continues Salbak.
The demand for residential supplies in Dubai increased from 342,000 units in 2011 to 270,000 units in Q2 of 2014, proving that the city does not seem to be taking notice of the small decline in sales.
Although rental prices continue to rise in most areas of the cosmopolitan city, according to the report, there has been an increase of four per cent within the apartment rental market, when compared with Q2 of 2013. Meanwhile, residential villa rentals increased by one per cent, when compared with the same period.
“Downtown Dubai and Dubai Marina are still the most favoured locations to rent in Dubai, but we see a shift to locations such as Tecom and JLT, because of the high prices in both Downtown Dubai and Dubai Marina,” concludes Salbak.