DUBAI: Dubai’s booming property market is showing signs that it may be cooling off, industry data showed yesterday, after two years of soaring prices that had drawn warnings of possible overheating from the International Monetary Fund.
Property price rises, at close to 30 percent year-on-year, had been among the highest in the world throughout 2013 and the first part of 2014, causing many to fear a repeat of the local market crash of 2008-9, which saw prices slump more than 50 percent.
But average residential rents fell 1 percent in the third quarter, their first decline since 2012, pressured by weaker demand during the holy month of Ramadan and a rise in new home supply, a report by real estate investment firm CBRE said.
A separate report by property consultant JLL showed that residential rents and sales rose 2 percent and 1 percent in the same period, slower than the respective 3 percent and 6 percent increases posted in the second quarter. “Driven by tighter government regulations and an increasing mismatch between buyer and seller expectations, the residential sector is now experiencing a welcomed period of stability,” the JLL report said.
JLL added it expected rents and sale prices to remain relatively stable over the rest of 2014, “with the market behaving in a more sustainable and healthy manner”. The data is the first to suggest that the Dubai real estate market might by cooling off after soaring since 2012, and will be used by the authorities in the emirate as evidence that measures taken to prevent speculation driving up prices are beginning to impact. Reuters
