|By TAP Staff| The downward trend in Dubai’s residential market continued in the third quarter with sale prices falling further and rents registering marginal declines, real estate consultancy JLL said in its report for the third quarter.
While the general REIDIN sales index dropped 10% Y-o-Y in August, the rental index points to a 1% decline in rental values. This comes as tighter government regulations, higher inflation levels and a stronger dollar have made property expensive for both local and overseas investors, resulting in a decline in the volume of transactions and a drop in prices to more sustainable levels.
Prices are expected to continue softening over the remainder of the year and into 2016, before the Emirate witnesses another growth cycle in the years leading up to Expo 2020, the report said.
Activity in the retail market remained subdued over the third quarter as annual rental growth rates across all mall types continued to slow down. As the growth in retail sales figures remains sluggish, landlords now have to adopt more realistic and rational approaches to leasing in order to retain their tenants.
With the market currently situated at the top of the real estate cycle, JLL expects rents to drop over the next quarter and into 2016. Q3 saw the delivery of phase 1 of MAF’s City Centre Me’aisem in International Media Production Zone (IMPZ), adding 23,850 sq m of GLA to the total retail space. An additional 161, 00 sq m is expected to be delivered in the remainder of the year, comprised mainly of extensions to existing super regional malls.