Citing reasons for the softening prices, the Core Savills report mentions several external factors such as regional instability issues, global macroeconomic concerns. In particular, a Chinese crackdown on capital outflows, Russian sanctions and the falling ruble, the appreciating dollar and overall Euro Zone issues are mentioned as making their mark on Dubai’s residential market. The steady nature of the price correction, however, is touted as a sign that Dubai’s real estate sector is maturing thanks to investors with longer term vision and a market that overall is deeper than 2008. For these reasons Dubai is in a better position today to absorb external economic shocks than it was in 2008.
Taking a closer look at the office space sector in Dubai, the research shows the sector will remain stable, with a steady growth forecast and greater choice for tenants as the city continues to be well positioned to offer companies a competitively priced choice for investment and growth.
Since Dubai is viewed as a great place to do business, Downtown and the DIFC are now considered by many to be the unified central business district for the entire region and foreign companies are still happy to pay a premium to open offices in these prime locations. This is resulting in extremely low vacancy rates in the sector.
Commenting on the research, David Godchaux, CEO of Core Savills said: “Our most recent report comes after deep analysis of different segments of the real estate market. It aims to give our clients research-backed advice to guide their rental and investment and decisions, and to inform landlords and tenants on market movements in key areas. Through our research, we are confident that the residential sales market will return to growth during 2016 after a period of healthy price decline. An adjustment, however, does not mean crisis – on the contrary, a healthy softening is what Dubai really needs to give renewed confidence to long term investors that the real estate market has matured and gained more depth and liquidity.”
