Dubai property prices begin to decline after years

The Dubai property market is experiencing significant changes, giving buyers more power than in recent years. Recent data shows that property prices are beginning to drop, which suggests that sellers and developers are more willing to negotiate. Some industry commentators describe this decline as temporary but many agree that prices have been falling across various areas for several months. A key factor behind this shift is an increase in property supply. Over the next four years, more than 300,000 new homes are expected to be delivered. This influx has created a situation where there are more homes for sale than at any time in the past six years. As demand softens, bidding wars have become less common. Developers, aiming to maintain cash flow, are turning to joint ventures and offering discounts for upfront payments. Consequently, properties are staying on the market longer, similar to trends seen globally, including a 5% drop in existing home sales in the U.S. In Dubai, land prices have also begun to decline, alongside lower sales volumes. Concerns related to the supply chain have been cited, but many believe that prices had risen too far above their true value. As a result, buyers are now negotiating lower prices more frequently, leading to a rise in deals falling through. There is also buyer resistance to making large down payments or taking higher loans, especially if renovations are needed afterward. New home supply has reached levels that can meet over a year’s demand, which was not seen since the market’s last boom-bust period in 2014. For retail buyers, this means more options and potentially lower prices. In certain areas, like JLT, the price gap between ready homes and offplan properties has widened, making ready homes more appealing. Overall, buyers now have the leverage to be more selective and cautious in their investments.