DUBAI (Reuters) – Real estate investment firm CBRE Group said average residential property prices in Dubai rose 4.4% in the twelve years ending August, the highest annual increase since February 2015.
But a steady decline in rents indicates continued weakness in a sector that has been in trouble for a long time. CBRE Rents in Dubai continued to decline, averaging 2.7% in August.
Reuters reported in March that the luxury sector had seen an improvement in the Dubai real estate market after the rapid decline caused by the Kovit-19 epidemic, but the path to recovery in the sector is still long.
Even before the epidemic, the long-term economic trend in the UAE was slow after the fall in oil prices in 2015 and 2014. The supply of new homes and apartments has been greater than the demand in the existing market for foreigners for many years, many of whom were evacuated during epidemics.
CBRE data show that market trends continue to lean in favor of villas rather than apartment blocks, and prices are still below a historic high. Although apartment prices rose 2.5% and villa prices 17.9 percent in the twelve months to August, they were 30.4% and 20.5% lower than the 2014 peak, respectively.
Apartment rents fell 5.2% year-on-year in August, while average villa rents rose 15.5%, the highest growth rate in the sector.
Occupancy in the office market increased to 28.8% in the third quarter of this year from 77.1% in the previous quarter. Meanwhile, the average rental premium in the third quarter and from one to three classes fell by 4.1% to 6.5% y / y.
Prices came under pressure from new entrants such as CPRE, international and local technology companies and Chinese and financial technology companies. These companies demand premium offices and first class offices.