<Average house prices in Dubai fell slightly, according to Colliers International's Dubai House Price Index, for the second quarter of this year.
The index recorded a 4% drop in house prices since the first quarter of this year, the first quarter-on-quarter contraction in 12 months.
The company said in a statement yesterday that the index fell five basis points, from 119 points in the first quarter of this year, down to 114 in the second quarter of the same year, and the average price of homes recorded about 1014 dirhams per square foot in the second quarter of this year, after reaching 1061 dirhams per square foot in the first quarter.
«Although the index declined in the second quarter of this year, it still shows a 7% increase in overall house price values year-on-year, compared to the second quarter of last year,» she said, warning that the upcoming increase in the number of homes on offer, coupled with lower rental income, could put pressure on house prices, pushing them down further in the coming period.«
Colliers International's regional director, Ian Albert, said a 4% decline in the second quarter of this year is a relatively modest change compared to the extreme volatility of the index between 2008 and 2009 when it showed a 50% increase in house prices before falling back to 2007 levels. »In the past 12 months, the index has moved within 1.8% of the average index value of 115 points, indicating a degree of stability over the past year,» he added, predicting a further slowdown, amid ongoing concerns that more homes are coming onto the market, preventing further recovery.
The company expects about 33,000 housing units to come on the market by the end of this year, down from its previous estimate of 41,000 units, following delays or rescheduling of several projects in Dubai. A significant number of these units could be delayed until next year, it said.
Albert pointed out that there are more than 340,000 residential properties in Dubai, with an occupancy rate of 87%, expecting this rate to decrease, and said that «the market cannot absorb the additional numbers of real estate units, unless the population increases, or the entry of these new real estate units into the market slows down.» The index showed a 5% decrease in apartment prices in the second quarter of this year, compared to the first quarter of this year, and a 3% decrease in the prices of villas, in addition to an 8% decrease in the prices of townhouses.
According to the company's report, apartments accounted for 34% of the total real estate transactions in the mentioned period, while villas accounted for 49% of the total transactions, and townhouses accounted for 17%.
The index recorded a 4% drop in house prices since the first quarter of this year, the first quarter-on-quarter contraction in 12 months.
The company said in a statement yesterday that the index fell five basis points, from 119 points in the first quarter of this year, down to 114 in the second quarter of the same year, and the average price of homes recorded about 1014 dirhams per square foot in the second quarter of this year, after reaching 1061 dirhams per square foot in the first quarter.
«Although the index declined in the second quarter of this year, it still shows a 7% increase in overall house price values year-on-year, compared to the second quarter of last year,» she said, warning that the upcoming increase in the number of homes on offer, coupled with lower rental income, could put pressure on house prices, pushing them down further in the coming period.«
Colliers International's regional director, Ian Albert, said a 4% decline in the second quarter of this year is a relatively modest change compared to the extreme volatility of the index between 2008 and 2009 when it showed a 50% increase in house prices before falling back to 2007 levels. »In the past 12 months, the index has moved within 1.8% of the average index value of 115 points, indicating a degree of stability over the past year,» he added, predicting a further slowdown, amid ongoing concerns that more homes are coming onto the market, preventing further recovery.
The company expects about 33,000 housing units to come on the market by the end of this year, down from its previous estimate of 41,000 units, following delays or rescheduling of several projects in Dubai. A significant number of these units could be delayed until next year, it said.
Albert pointed out that there are more than 340,000 residential properties in Dubai, with an occupancy rate of 87%, expecting this rate to decrease, and said that «the market cannot absorb the additional numbers of real estate units, unless the population increases, or the entry of these new real estate units into the market slows down.» The index showed a 5% decrease in apartment prices in the second quarter of this year, compared to the first quarter of this year, and a 3% decrease in the prices of villas, in addition to an 8% decrease in the prices of townhouses.
According to the company's report, apartments accounted for 34% of the total real estate transactions in the mentioned period, while villas accounted for 49% of the total transactions, and townhouses accounted for 17%.
