The Dubai residential property market is starting to stabilize, according to the latest report from property consultants Jones Lang LaSalle. At the end of the second quarter of 2009, the decline in achieved prices slowed to 6 percent. The achieved price is the amount a seller receives compared to the amount asked.
Additionally, there is a considerable supply of new units coming on line despite the many projects being put on hold or cancelled. For all of 2009, over 22,000 residential units are expected to be finished. Transaction volume was stable between the first two quarters, with the year over year numbers down 58 percent.
Asking prices for properties have fallen 49 percent from their peak in the third quarter of 2008, but the rate of decline slowed in the second quarter of this year. The asking prices have fallen more sharply than achieved prices in 2009, which is another indicator of price stabilization.
Craig Plumb, Head of Research at Jones Lang LaSalle MENA added: “The stabilization of transactional volumes is an important indicator, which reflects improved confidence among investors. The narrowing gap between asking prices and achieved prices is a further indication that the market is beginning to stabilize, albeit at significantly lower levels of pricing than those seen earlier in the year.”
“While there have been a large number of projects delayed or cancelled, there remains a significant level of new supply, with around 22,400 residential units expected to be completed across Dubai in 2009.”
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