Property prices in several areas in Dubai - a real estate hotspot and regional safe-haven - have fallen by as much as $6,800 in the past year, a new report suggests.
In high-end areas of the city, which are populated by large numbers of wealthy locals and expatriates, values have remained steady, or even risen, according to report by Core (PDF), an associate of real estate advisory Savills.
Values on the Palm Jumeirah, a man-made island jutting out into the waters of the Arabian Gulf, had seen only moderate drops. Meanwhile, average prices in Sports City, a lower-cost residential development surrounded by desert and highways, were down by about $4,300.
The price of a 500 square-foot studio apartment in Sports City starts at around $120,000.
The report noted that the outlook for Dubai’s property market, while “fundamentally sentiment-driven,” remains steady.
Dubai’s high turnover of expatriates, most of whom cannot seek citizenship, allows property investors high rental yields.
“Average gross yields for villas are currently running at 5.7% while for apartments they are 7.6%, indicating significantly stronger rental returns for apartment investors,” the report noted.
In contrast, property investors in the British capital London can expect rental yields at only around 4%, according to London Property Watch.