Investment Firm Says Dubai Property Bubble "Deflating"

By Dex Tennyson, for 02 February, 2015

An international real estate investment firm has said that Dubai's residential property bubble is deflating and believes average prices will remain the same or fall by up to 10 percent during 2015.

The prediction appears in a new study from JLL, entitled 2015 Top Trends for UAE Real Estate.

JLL MENA's head of research, Craig Plumb, explained that price and rental rates had grown at an unsustainable rate over the past two years and that stability "may be just the thing that Dubai needs in the long term."

The study also notes that there is increasing recognition of the need to refine Dubai's existing rental cap provisions, to reflect differences in the quality of properties.

JLL's assessment comes in the wake of a report from the Economist Intelligence Unit (EIU) late last year which identified increasing property costs as having a "major impact" on the personal finances of expats, negating some of the benefit of living in tax-free Dubai.

According to the EIU, most expatriates in the UAE have little choice but to rent high-end accommodation, while the legal environment and the "boom and bust" property market of recent years have made many expats uncomfortable with making property purchases.

The CEO of JLL MENA, Alan Robertson, said that concerns over the negative impact of lower oil prices have been a "major dampening factor" on the market. However, he added that Dubai is less vulnerable to lower oil revenue than other Gulf Cooperation Council (GCC) oil exporters, due to its diverse economy and growth in non-oil sectors.

Tags: Expatriates | United Arab Emirates | Environment | Investment | Gulf Cooperation Council | Dubai | Expats | Investment | Property Investment | Invest | Lifestyle | Investment | Lifestyle |


News Archive