Dubai house prices set to slip 5% in 2012 – experts

Dubai’s real estate market is seeing “selective stabilisation”, with a pick-up in transactions expected early next year, Cluttons said on Tuesday.

The real estate company said in a statement it has taken on 10 new staff “to meet demand in the New Year”, adding that prices were close to bottoming out in Dubai.

“Despite the negativity arising from the ongoing economic turmoil in Europe and the US, Cluttons notes that the Dubai real estate market ends the year with more positivity than seen in the previous three years,” the statement added.

It said the high end residential sector in particular seemed to be benefiting from ongoing capital shifts in the region as a result of the Arab Spring.

Cluttons added that commercial occupier interest also “appears to be slowly improving as a consequence of the cost savings available in what remains a tenants or buyers market”.

The company said the decline is prices in Dubai were continuing to slow, “bringing a feeling that they are close to bottoming out”.

Cluttons also identified a “general maturing of the marketplace in 2011” with landlords becoming more flexible in their terms.

Steven Morgan, head of Cluttons in the UAE, said: “We are encouraged by the stabilization seen in certain areas of the UAE’s residential and commercial real estate market and have staffed our team accordingly for 2012.”

On Sunday, Asteco said Dubai’s real estate market held steady for a fourth consecutive quarter in a sign the Gulf’s worst-performing property sector was showing signs of recovery.

Rental rates for apartments in prime and midmarket locations stabilised in the fourth quarter, with Nakheel’s International City the only project to see a small slide in lease rates.

“Transactions levels are rising as job security and increased market confidence results in people seeking tenancy upgrades and home ownership,” said Elaine Jones, CEO of Asteco.