Dubai house prices will decline sharply this year and next, according to property market experts in a Reuters poll, who said a slowdown in the economy and an oversupply of housing units are big downside risks to their already weak outlook.
Dubai - with a diversified trade and tourism economy and one of the seven territories of the United Arab Emirates - has faced a sharp slowdown in its real estate market for most of this decade, barring a pick up for a brief period more than five years ago.
That downward trend is likely to continue in Dubai housing market activity, one of the primary contributors to its gross domestic product.
The Reuters poll of market analysts at 11 investment firms and research institutions showed house prices in Dubai would fall 10% this year and 5% next. They are forecast to decline 3.3% in 2021.
Those views also driven by worries the US-China trade war is hurting global growth, and lines up with similar Reuters polls which showed housing market activity in the United States, Britain, Canada, and India is struggling.
Last year, Dubai’s economy grew just 1.94%, the slowest since the 2009 financial crisis, hurt by a rough patch amid a downturn in its real estate market.
Dubai, whose economy is focused on tourism and international business services, is now forecast to grow 3.8% in 2020 and 2.8% in 2021, according to the government, but much will depend on external factors.
Dubai house prices to fall sharply