Experts says Prime time to buy in Dubai but Abu Dhabi rents are rising
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Property prices in Dubai will probably fall by up to 20 per cent in 2015, according to a report by ratings agency Standard & Poor’s.
The move – due in part to 20,000 flats and villas coming onto the market this year – will allow those who can find a deposit to get onto the property ladder, real estate agents said. Prices dropped by 4-5 per cent between January and April as a market “correction” begins to take place, S&P said, adding that the trend is likely to continue into early 2016.
The planned arrival of 20,170 new units – many in Sports City, Dubailand and Akoya – is up from the three-year average of 11,600. S&P did not specify which areas would see the biggest drops but said 10 per cent was expected in central Dubai, dropping to 20 per cent in outlying suburbs.
Mario Volpi, managing director of Dubai-based Ocean View Real Estate, said: “This is good news for residents of Dubai. With this correction, people with steady incomes can look at the possibility of buying instead of renting, especially residents with a long term plan. “There are many new people coming to Dubai and they will certainly benefit from this even in terms of rental.” He added: “There are around 20,000 units coming this year followed by around 13,000 next year.”
But, in terms of rent, S&P said Abu Dhabi is “experiencing a shortage of quality housing, which is why rents will continue to climb”. Tenants saw an average rise of 11 per cent in 2014 and only 5,000 units are planned for this year, S&P said.
Ahmed Tawifk, from Excellent Estate Property Management, said some Abu Dhabi families are downsizing due to rent rises. He said: “Most of our clients are looking for cheaper options by switching to two bedrooms, having previously had three or four bedrooms. “As rents are shooting up to more than Dhs170,000-180,000 per year for three beds, 90 per cent of people who get in touch are looking for cheaper options.”
Frank Delage, primary credit analyst at Standard and Poor’s, added: “According to our study, rents will continue to rise, on a slow pace.”
The move – due in part to 20,000 flats and villas coming onto the market this year – will allow those who can find a deposit to get onto the property ladder, real estate agents said. Prices dropped by 4-5 per cent between January and April as a market “correction” begins to take place, S&P said, adding that the trend is likely to continue into early 2016.
The planned arrival of 20,170 new units – many in Sports City, Dubailand and Akoya – is up from the three-year average of 11,600. S&P did not specify which areas would see the biggest drops but said 10 per cent was expected in central Dubai, dropping to 20 per cent in outlying suburbs.
Mario Volpi, managing director of Dubai-based Ocean View Real Estate, said: “This is good news for residents of Dubai. With this correction, people with steady incomes can look at the possibility of buying instead of renting, especially residents with a long term plan. “There are many new people coming to Dubai and they will certainly benefit from this even in terms of rental.” He added: “There are around 20,000 units coming this year followed by around 13,000 next year.”
But, in terms of rent, S&P said Abu Dhabi is “experiencing a shortage of quality housing, which is why rents will continue to climb”. Tenants saw an average rise of 11 per cent in 2014 and only 5,000 units are planned for this year, S&P said.
Ahmed Tawifk, from Excellent Estate Property Management, said some Abu Dhabi families are downsizing due to rent rises. He said: “Most of our clients are looking for cheaper options by switching to two bedrooms, having previously had three or four bedrooms. “As rents are shooting up to more than Dhs170,000-180,000 per year for three beds, 90 per cent of people who get in touch are looking for cheaper options.”
Frank Delage, primary credit analyst at Standard and Poor’s, added: “According to our study, rents will continue to rise, on a slow pace.”
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