With realty prices down, the time to invest in Dubai is now

With Dubai's realty market showing signs of a gradual price correction, after zooming north for most part of last year, industry experts are exhorting investors and buyers to invest their monies in its realty market, citing the softening of property prices as the opportune time to buy in at attractive valuations.

The reason for their overwhelming confidence stems from a recent report that claims a gradual decline in property prices and rental values in Dubai, owing to a slowdown in property transactions in recent weeks.

The report further adds in the first six weeks of the second quarter, realty values have continued with their slow descent with apartment prices falling about 1.5 percent while rents registered a sharper drop of approx 2.4 percent. However select areas like Karama, Jaffliya, Deira and others close to the Dubai Metro have seen an increase in values contrary to the general trend.

According to figures released by Phidar Consultancy which termed the price decline as a healthy correction, the sale prices for villa properties dropped by about 2.9 percent while rents fell by 0.6 percent. 2015 has witnessed fewer investors buying new property in Dubai as compared to the preceding year with apartment transactions recording a 1.5 percent decline from 2014 levels.

Earlier this month Reidin had made a similar announcement stating that Dubai's residential property sales price index had in fact dropped in April this year compared to the corresponding month last year. Reidin had estimated that during this period apartment prices had dropped 0.87 percent while villa prices were down by about 1.84 percent.

Other realty analysts have attributed this decline in property rates in Dubai to an overall slump in demand for luxury properties, the ongoing weakening of global oil prices and the strengthening of the US dollar.



Yet experts add that there is no cause for alarm just as yet, with Dubai's realty market still doing much better than some other comparable markets like Hong Kong and London and continued government investments into infrastructure and housing expected stabilize the market in due course. While returns from large to small apartments in Dubai ranged from 5-7 percent, cities like Hong Kong, Singapore and London averaged somewhere between 2-3.5 percent.

Leading property portal bayut.com has gone further and listed popular areas like Deira, Karama and locations close to the Dubai Metro route as being immune to the ongoing price decline and on the contrary recording an increase in their rental values.
   
In terms of their property values, upmarket locations like Dubai Marina and Downtown Dubai also seem to have bucked this trend, a fact attributed by industry experts to the relative fewer number of new developments here. Interestingly a bulk of areas which have been impacted by the softening of property prices are expecting a huge influx of housing units in the months ahead.

Putting things in perspective Haider Khan the CEO of Bayout.com feels that multiple factors including speculative buying and the anticipatory sentiment of property investors eyeing the Dubai market were responsible for the sudden increase in its property values.

According to him the current softening of property prices is likely to result in more realistic prices going forward, which in turn will encourage investors and end buyers to buy property here at affordable prices. "We believe that the current softening of property prices is a result of the ongoing market correction that will soon peg the demand and supply forces at a more sustainable level," he added.