Dubai residential rents are likely to fall by five per cent, while property prices will be down by 5 to 10 per cent in 2015, according to a new report.
“Prime residential prices and rents are predicted to soften in 2015. Indeed, we expect prices to fall by 5-10 per cent, and rents to decline by up to 5 per cent,” Knight Frank, a UK-based consultancy, said in its 2015 outlook report.
Residential price growth entered negative territory in both the prime and mainstream segments in third quarter 2014, with the former seeing a 0.2 per cent fall and the latter a 5.2 per cent decline, according to Knight Frank.
In 2015, new residential supply in the mainstream segment is expected to equate to around 5.5 per cent of existing stock, it said, without giving the number of existing stock.
JLL, a real estate consultancy, however, puts the current residential supply at 377,000 and believes 25,000 new units will be added in 2015. But in the run-up to Expo 2020, the emirate is likely to face a housing supply shortage.
Read: Dubai may face housing shortfall by 2020
Last week, JLL officials said Dubai residents could expect rental declines this year, with landlords even offering rent-free periods to their existing tenants.
However, a comparison done by Emirates 24|7 of the first rent index update of 2015 had revealed that rents across some master communities had risen by 6 to 25 per cent. Real estate experts have sought changes to the rent index, which is updated thrice a year. It is believed that a new rent index format will be released this year.