Activity in Dubai’s real estate market was subdued in the first quarter of 2015, according to a report released today by JLL.
“The Dubai real estate market continued to experience subdued activity during the first quarter of the year. Residential sale prices saw a marginal decline across both apartments and villas, although rents remained relatively flat,” says Craig Plumb, Head of Research at JLL MENA,. “We expect this trend to continue with average sale prices declining by up to 10 per cent during 2015. Sale prices normally move ahead of rents and this appears to be happening in the residential market in Dubai at present.
“We anticipate the commercial sector will see a significant increase in supply during the next couple of years, particularly of Grade A office space,” Plumb says. “The retail market continues to be constrained by the decrease in spending, restricting overall growth levels. We expect performance of the retail market to remain stagnant throughout 2015, following estimates of a slowdown in retail sales growth figures. The latter is likely to put pressure on retailers and push out some of the small and mid-sized tenants, as they face difficulty achieving targets to meet high rents.”
“The hotel sector continued to face competition in the first quarter of the year,” says Chiheb Ben Mahmoud, Head of Hospitality at JLL MENA. “The increase in supply on one hand and the perceived softness of the inbound travel market on the other are leading some hotels to review their pricing and revenue management strategies.”