The residential market in Dubai is heading towards a soft landing following a period of restraint in the wake of oil price volatility and negative investor sentiment. With sale prices becoming more realistic and developers adopting a more mature approach to their project launches – phasing projects out and releasing them in line with demand – confidence is expected to return to the market.
Dana Salbak, Associate Partner and Head of Research at Knight Frank Middle East commented ‘While we have seen a slowdown in demand for residential property in Dubai over the past 18 months, the appetite remains healthy and is expected to rebound over the next couple of years as investors regain their confidence. The real estate market is more mature, and this resilience will drive the next growth cycle.’
Knight Frank Middle East released its first edition of Inside View Dubai, featuring current research on the Dubai residential market and lifestyle editorial. The report discusses the outlook for the emirate in general and real estate sector in particular, and stresses its dependence on a number of regional and global variables.
In this regard Dana commented ‘Dubai’s position as a leading financial hub and competitive tourist destination leaves it exposed and vulnerable to global events. Further volatility in oil prices, elections in the US and across states in the Eurozone, and on-going geopolitical tensions are likely to impact the behaviour of markets, currencies and investor sentiment. This in turn will reflect on the demand for property in Dubai.
While it’s difficult to predict when the next growth cycle will be, the report expects the residential market to level out by the end of 2016 before seeing gradual recovery in 2017. This is further supported by the on-going government spending on key projects geared towards the Expo 2020 Dubai.