The residential market could be making a slow recovery
Dubai's residential real estate market is showing signs of renewed confidence as transactional volumes remained stable between the first two quarters of the year, according to a new report.
Jones Lang LaSalle MENA's Q2 2009 Dubai Residential Market Snapshot showed that while the average prices have continued to fall (by around 24 percent in Q2), the rate of decline is now falling and there has been a convergence between asking and achieved prices.
There has also been a lower rate of rental decline than before, with the average rent for two bedroom apartments falling by 15 percent in Q2, compared with a 22 percent decline in Q1 2009, the report added.
New residential supply continues, with 22,400 residential units expected to be handed over in 2009, in spite of over $24 billion worth of residential projects being put on hold or cancelled.
On the demand front, transactional volume remained stable between Q1 and Q2 in comparison to the 58 percent decrease between Q2 2008 and Q2 2009.
Craig Plumb, head of research at Jones Lang LaSalle MENA said: "The stabilisation of transactional volumes is an important indicator, which reflects improved confidence among investors.
"The narrowing gap between asking prices and achieved prices is a further indication that the market is beginning to stabilise, albeit at significantly lower levels of pricing than those seen earlier in the year.
"While there have been a large number of projects delayed or cancelled, there remains a significant level of new supply, with around 22,400 residential units expected to be completed across Dubai in 2009."