Dubai home sales plunge 66pc in first half on government tightening moves
Slowdown could prompt concern among authorities due to foreigners' easy access to the property industry
Dubai home sales shrank by about two-thirds in the first half of this year, and prices also slipped, with further declines expected over the rest of the year, property consultants JLL said in a report last week.
The real estate sector in Dubai, one of the seven United Arab Emirates, has been among the most volatile globally over the past decade. Home prices had recovered to near peak values last year after falling by about half from their 2008 highs, but are now again in retreat.
The plunge in home sales this year is partly due to government steps to ease market volatility - officials have raised minimum deposits required for mortgages and doubled real estate transaction fees.
But the slowdown could prompt concern among Dubai authorities as the property industry is one of the sectors most easily accessible to foreign investors. On Monday, Dubai's S&K Estate Agents blamed a deteriorating market as it filed for bankruptcy.
The total value of residential property transactions fell 66 per cent to 12.7 billion dirhams in the first half of this year and the volume of sales plunged 69 per cent, compared with a year earlier, JLL said, citing Dubai government data.
Sales prices have dropped by an average of 8 per cent since June last year, added JLL, one of the world's largest real estate consultants.
"We expect transaction volumes, and subsequently sale prices, to drop further in the second half of the year," said Craig Plumb, regional head of research at JLL.
Apartment sales prices fell 9 per cent in the second quarter of this year, while house sales prices dropped 5 per cent.
About 16,000 units - apartments and houses - are due to be handed over by developers in the second half of the year, bringing Dubai's total number of such properties to 395,000. But JLL said the market slowdown could lead to delays in completing projects, into next year and beyond.
Dubai's tourism sector has also suffered, with hotels' revenue per room falling 9 per cent to US$208 for the year to May. JLL warned that, with the number of rooms forecast to increase by nearly half to the end of 2018, room rates were likely come under further pressure.