Dubai prices foreseen to fall as supply grows

Both rents and sale prices take a plunge as thousands of residential units come online

With almost 29,500 units to be delivered in Dubai for 2019, home rents and sale prices in the emirate will continue their descent this year and the next, according to The National, citing data from Core Research.

Some 13,000 units are expected to come online for the rest of 2019, the consultancy reported. “We expect rental prices to remain under pressure in 2019/2020 and the rental market to continue being tenant-friendly,” researchers at the firm were quoted as saying.

As of the third quarter of the year, apartment rents have plunged 13 percent annually in Discovery Gardens. The drop is the steepest in the emirate, followed by a 12 percent decline in Dubailand.

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“Many tenants are looking to move by upgrading to bigger and newer developed projects for similar or lower rents,” the consultancy reported. “Tenants who aren’t relocating are negotiating during rent renewals and mostly achieving rent reductions, as tenant retention becomes increasingly challenging for landlords.”

Meanwhile, apartment sale prices sank 19 percent in Dubailand, followed by declines of 15 percent in Discovery Gardens and Dubai Sports City. Villa prices in Jumeirah Village slid 13 percent, the sharpest drop in the emirate.

“Sales prices are forecast to remain under pressure in the foreseeable future as the market gradually adjusts to supply and demand dynamics on the back of ongoing reforms,” the consultancy stated.