Apartment and villa prices in Dubai and Abu Dhabi were between 4% and 6% lower in the second quarter compared to the same time last year, new research shows.
Property prices fell by under 1% on a quarter-by-quarter basis, with average rents seeing “modest and reduced declines”, according to the Cavendish Maxwell Q2 2016 Residential Market Reports.
Apartment sales prices in Dubai declined by up to 1% during Q2 and by an average of 6% over the last 12 months, the property consultancy said. Prices have declined nearly 12% since the high of Q2 2014, with market direction “largely imitating the oil price drop”, it added.
The majority of agents predict apartment and villa prices as well as rents to remain unchanged in Q3, Cavendish Maxwell said.
“Transaction activity is expected to remain muted during the third quarter in line with past trends,” said Manika Dhama, Research Manager at Cavendish Maxwell.
“Developers are promoting Ramadan-linked payment plans and the ‘affordable’ tag continues to be aimed at first time buyers. However, this is unlikely to ramp up buying activity in the short term among this target segment given the restrictive mortgage-lending requirements and overall liquidity in the market.”
In Abu Dhabi, price declines in investment zones were lower than in Dubai, with an average 0.2% drop in Q2 2016 and 4% on a year-on-year basis, Cavendish Maxwell said.
