Property
For the first time, a decline has been seen in the real estate market of Dubai. House prices, which have been continuously increasing since the pandemic, have now started coming down. Due to foreign investors and rich expatriates, this market had become one of the hottest markets in the world, but now the effect of regional tension is beginning to be seen. According to property consultancy company ValuStrat, the home price index fell by about 5.9% in March. This is the first decline after the year 2020. However, despite the decline, prices are still around the level of six months ago.
Why did the decline occur?
Dubai, which is part of the United Arab Emirates, has long attracted foreign investors and expatriates due to its tax-free environment. For this reason, after 2020, house prices had increased by more than 70%. But now the recent geopolitical tension, especially Iran’s retaliation after the attacks by America and Israel, has slowed down the pace of the market. For several weeks, investor confidence was shaken by the threat of missile and drone attacks.
Decline in sales and deals also
According to research firm REIDIN, residential property sales in Dubai declined by nearly 20% to 37.2 billion dirhams in March. At the same time, the number of deals also decreased from around 16,000 to around 13,000.
What will be the trend going forward?
Lewis Harding, CEO of property brokerage Betterhomes, says that the market will not immediately return to old levels and prices may remain soft. They believe that population growth may slow down, which will affect demand.
Some other reasons also responsible
According to experts, one of the reasons for the decline in March was the Eid-ul-Fitr holidays and the heaviest rainfall in UAE in many years. Despite this, the market may remain a little weak in the coming months.
Still not a complete crisis
However, experts believe that the market will not collapse completely. Over the last few years, Dubai has developed itself as a sustainable place to live. Foreign people are settling here due to schemes like Golden Visa, which will support the market in the long run. Overall, the property market of Dubai has cooled down a bit, but the chances of it becoming completely weak are considered low.
