Property News · December 27, 2016

Dubai homes at their cheapest in 5 years


Low oil prices and a strong US dollar are banes for the emirate
Burj Khalifa rises above the busy streets of Dubai. Dmitry Birin / Shutterstock.com
The transaction volume of off-plan and existing homes in Dubai in the third quarter stood at 900 units, Mansion Global reported, citing a report last week by Phidar Advisory. This is the lowest level recorded in the emirate since 2011, the UAE-based research firm noted.
India and Saudi Arabia, the two most dependable sources of investment in Dubai, are purposely missing out on the emirate’s property cache this cycle around.
Historically low petroleum prices are driving a wedge between Arab buyers and Dubai residential real estate. Indians, on the other hand, are put off from investing in Dubai homes because of the depreciating dirham, a currency that is not pegged to the US greenback.
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“The recent interest rate hike by the US Fed will likely support US dollar strength and, combined with a still relatively low oil price, will continue to constrain investment demand for Dubai real estate in the coming year,” Jesse S. Downs, managing director at Phidar Advisory, said.
India and Saudi Arabia are the largest investors in Dubai properties in H1, with AED7.3 billion (USD2 billion) and AED2 billion (USD544 million) in investments, respectively, according to Dubai Land Development.
Phidar reported an increase in transaction volumes in Dubai homes in November from September, but this is likely only “a reflection of seasonal variance,” Downs said.
Job cuts are increasing occurrences in the emirate, with low-paying industries among the most active employment generators, she observed. This will curb rental inflation, and in turn depress transaction values.
“It seems stakeholders forget to ask the simple question: who will live here and why?” Downs told The National.
Read next: Dubai: 4 things we know so far about its slumping market

Source : property-report.com
Read more…Dubai homes at their cheapest in 5 years

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