Property prices fall in Dubai, Abu Dhabi

Home buyers and those looking to rent in Dubai and Abu Dhabi can breathe a little easy with villa and apartment prices dipping between 4 and 6% in the second quarter, compared to the same period in 2015, UAE daily The National reported. But the report added that the market was likely to stabilize in the third quarter.

Quoting property consultants Cavendish Maxwell, the report cited a number of reasons for the fall in prices and the slowdown in the realty sector, from the slowdown in transactions related to summer and Ramadan to the tightening of credit by banks when it comes to mortgages.

Transactions in the third quarter, will be “in line with past trends," said Manika Dhama, a research manager at Cavendish Maxwell. Even though developers are trying to entice buyers using various payment plans and promoting affordable units aimed at first-time buyers, the curbs in mortgage-lending are proving to be a major dampener.

The second quarter price fall was steeper in Dubai, because the supply pipeline was much larger compared to Abu Dhabi the report added.

Rents have also declined by about the same amount during the second quarter versus the first quarter, Cavendish Maxwell said.

Certain high-end properties in Abu Dhabi such as Al Raha Beach, have seen steep drops, following job losses in the oil sector.
Property prices in the capital eased 4% compared to a year ago. Second-quarter prices in both emirates fell less than 1% when compared to the first quarter of this year.

During the second half of this year, more than 30,000 units are scheduled to be completed in Dubai, while in Abu Dhabi, an additional 3,100 units are slated to be come on stream.

According to Cavendish Maxwell, house prices have been dropping since the second quarter of 2014, coinciding with the plunge in oil prices. The UAE realty has seen prices dropping by 12% since then.