Luxury home values in Dubaiare dropping like stones

Luxury home values in Dubaiare dropping like stones

Luxury home values in Dubaiare dropping like stones

As Dubai’s real estate sector crashes, even expat investors are shying away from bargains.

Real estate values in Dubai have now dropped by 25 per cent over the past four years, leaving the property market in confusion and investors looking to pull out before it becomes worse. The continuing slump in oil prices plus the massive oversupply of luxury properties has taken a huge bite out of demand and left many real estate agents wondering where to go next. The market’s nose-dive is also affecting the rest of the UAE, with the biggest falls in the upscale property sector.

Even the most publicised developments in Dubai have been affected, with Palm Jumeira Island prices collapsing by almost 10 per cent in 2018 and still falling further this year. The massive Dubai Marina development has suffered much the same fate, as have the 80 Jumaeirah Lake Towers set along their three artificial lakes. Prices for villas and townhouses are also collapsing in spite of their former popularity with expats, and Downtown Dubai apartments are now 16 per cent cheaper. Even apartment prices in the Burj Khalifa have fallen by 12 per cent.

The majority of Dubai’s exclusive upscale developments came onstream and were sold prior to the 2008 financial crash, with homes listed at $1 million in 2014 now fetching less than $500,000. The dramatic decrease in value of many of the world’s most luxurious developments has hit investors and wealthy expat professionals hard, with the general feeling that hanging on and praying for common sense to be restored is better than losing a large chunk of invested earnings.

Property expats believe the market will take at lease a two-year period to recover, even although oversupply is still being ratcheted up as new developments come onto the market. Over 30,000 homes are due to be completed by the end of this month, with a further 96,000 scheduled for the back end of next year. Even top international realtors are saying the market needs to achieve a degree of maturity, the which is hardly possible without diversifying the UAE's and Dubai’s economies.

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