The Dubai residential market is showing early signs of improvement with the sales market expected to recover ahead of the rental segment in 2017, according to CBRE.
The real estate consultancy said that while negative growth was apparent, average prices declined by less than one percent underlining the gradual improvement in investor sentiment in recent quarters.
“The drop in performance reflected a relatively universal dip in rentals, which has been brought about by increasing supply levels across the Emirate in recent quarters, as previously delayed units were finally released to the market,” said Matthew Green, head of research and consulting UAE, CBRE Middle East.
He said the overall supply levels are likely to increase in the coming quarters, following the multiple development launches during and after this year’s Cityscape Global event in September, and will see continued growth in the build up to Expo 2020.
Office rentals in prime locations, particularly in Tecom, Dubai International Financial Centre and the central business district continued to see rates rising whereas the overall market is impacted by the lack of good quality and efficient office accommodation availability.
“There is likely to be a continued disconnect between the performance of the rental and sale markets, with the transactional segment likely to see a recovery first with a slight lag for the rental market,” the consultancy added.
Average prime yearly gross rentals remain unchanged at AED1,920 square metres per annum with secondary rental rates declining by around three percent to AED1,072 square metres per annum, the report said.