Dubai PR Network, Online Press Release from Dubai and Middle East
 
Property & Real Estate(Real Estate & Retail)
Filter PR by
  
Phidar Advisory Releases June & August Dubai Residential Property Note: Sentiment-fueled buoyancy fades, correction ahead
 

Tuesday, 12 September 2017– Today, Phidar Advisory released its Dubai residential research note with June and August quarterly data. The report shows nominal to moderate rent declines and forecasts further softening, based on three-month moving averages.

“The false start of early 2017 is over and the cracks are starting to show,” said Jesse Downs, Managing Director of Phidar Advisory. “Sale volumes of completed properties are at a 6-year low and vacancies are rising across the city,” she added.

In August, quarterly lease rates declined another 1.1%, while sale prices decreased nominally by 0.2%, pushing yields down slightly to 7.34%, based on a three-month moving average. The consistent (albeit slower) rent declines indicate that sale prices need to adjust downward. The quantitative and qualitative analyses indicate rent declines will continue through 2017 and into 2018 as job growth remains low and new supply is handed over. 

“Rent declines slowed over the summer, but higher vacancies should push rents down faster in the coming real estate season,” said Ms. Downs. “This is positive because the city will become more affordable for residents, which helps businesses by reducing employment costs. There is a fundamental shift in the demographics of Dubai and the real estate market has not yet adjusted to this new reality,” she added. 

Off-plan market transaction volumes remain steady due to developer subsidies in the form of post-handover payment plans. The result is a shadow financing market, which is creating an unhealthy divide between the primary and secondary markets. 

“Steady off-plan volumes are not an indicator of a healthy residential market,” said Ms. Downs. “The post-handover payment plans artificially boost demand and will likely lead to overbuilding, compounding the problem in the years to come,” she added.    
 
In Q2-17, Phidar’s Dubai Real Estate Investment Demand Index (REIDI) increased by 32.6% compared to Q1-17. Although this seems positive, the REIDI is still weak, in relative terms. Q2-17 represents relative improvement compared to Q1-17 because the latter had the lowest REIDI value since 2002. The Q2-17 value is on par with the average value since Q1-15. Short term gains were driven by exchange rate fluctuations and modest weakening of the USD. 

“We estimate that the residential market is still over-valued by around 15 to 20 percent,” she said. “False expectations of a 2017 recovery kept the market temporarily stable, but the fundamentals indicate another phase of correction is required before the market can recover,” concluded Ms. Downs.


Posted by : Dubai PR Network Editorial Team
Viewed 4520 times
PR Category : Real Estate & Retail
Posted on : Tuesday, September 12, 2017  1:05:00 PM UAE local time (GMT+4)
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of DubaiPRNetwork.com.
Previous Story : Building Surge Highlights Changing Face of Investment in Dub...
Next Story : Bloom Properties Updates Investors on Construction Progress ...
Email this article Print this article

Share this article with your friends and followers
NewsVine
Back to Section Home

Related Stories



 
 
Most Viewed Press Release posted in the last 7 days
AIGNER Love [22338-Views]
New Year, New Skincare! [16330-Views]
Signature Scents for Your Home [13676-Views]
Spring/Summer 18' Beauty Picks from Missha Cosmetics [12102-Views]
Mido's Baroncelli Prisma - A sparkling play of prisms enhanced by 51 diamonds' [8985-Views]
The Trésor Collection [8534-Views]
Malabar Gold & Diamonds strengthens its global position as a leading jewellery retailer wi... [7448-Views]
“12th Edition of SNF's Family Fun Fair” [7338-Views]
ESC's INDIASOFT to Bring Over 400 ICT Foreign Buyers To Bengaluru [7131-Views]
5 Different Types of Denim and How to Wear Them [6722-Views]
The Balmain de Balmain Moon Phase Collection - loves personalisation to the moon and back [6637-Views]
EUROSTAR presents seven global tech majors at CABSAT 2018 [6527-Views]
Nissan reaffirms importance of electrification at World Future Energy Summit [6063-Views]
Womenswear Preview and Showroom Connection: WHITE Man & Woman's Formula Bets on Quality [6057-Views]
Nissan and NASA extend research into autonomous mobility services [5948-Views]
Dubai Tour team line-up announced: 16 teams of seven riders at the start [5856-Views]
Defender Lives on: Land Rover Launches V8 Edition To Celebrate 70th Anniversary [5764-Views]
Tommy Hilfiger Announces Fall 2017 Watches Collection [5618-Views]
Sophie's Café brings all the goodness to Barsha Neighbourhood [5496-Views]
Seamaster Olympic Games Collection [5136-Views]
His Highness Sheikh Hasher bin Maktoum bin Juma Al Maktoum Visits du's Stand on Day One of... [5051-Views]
Dubai Outlet Mall celebrates DSF 2018 with amazing attractions for shoppers [4984-Views]
HH Sheikh Hasher Bin Maktoum Al Maktoum opens CABSAT 2018 [4868-Views]
Masdar unveils locally manufactured all-electric Eco-Bus at Abu Dhabi Sustainability Week... [4813-Views]
LG Electronics Earns CES 2018 Best TV Product Honors for LG AI OLED TV [4630-Views]
 
RSS Facebook Twitter LinkedDin
 
Top Sections
 
Top Stories