Property prices in Dubai have been falling for a while now, and there seems to be no end in sight to the decline. The outlook for 2017 is not all that bright either, according to the property consultancy Cluttons. But the picture might change soon, following Donald Trump’s largely unexpected win in the U.S. Presidential race.
What does mean for you, if you’re planning to sell property in Dubai online? Quite a lot, actually. First, let’s try to understand how bad the situation in the Dubai real estate market has been so far.
Home values in the emirate have declined by 7.4% in the third quarter of 2016. They are expected to drop by 5% in the fourth and last quarter of the year. According to the head of research at Cluttons, Faisal Durrani, home prices in Dubai have dropped by 27% from their peak in 2008.
This is certainly shocking for Dubai, where almost everyone is heavily invested in real estate. Dubai also gets a large number of foreign investors. Real estate transactions have declined by 30% in value in the first 7 months of the year. The fall in oil prices has had the biggest role to play in the economic slowdown not just in Dubai, but across the Middle East.
As Faisal Durrani of Cluttons explains, "Government spending on projects related to the Expo 2020 will help create jobs and stimulate demand, but the impact will not start to be felt for another six to nine months. In the meantime, stubborn sellers at the top end of the market who had been holding out over the past 12 months are now facing reality."
How does Trump’s win change that? For one, we expect a strong interest in Dubai from American property investors, who may want to branch out of the US and diversify following Trump’s win, to hedge themselves against any possible negative turn that the US real estate market could take.
This could push up property prices in Dubai in 2017. A popular Arab property portal, Propertytrader.ae has claimed to have received more visitors from the US over the last couple of weeks than at any time in the past.
“Throughout 2016, the buyer search ranking of US visitors on propertytrader.ae was consistently at about fifth or sixth place. In November, we are already seeing that go up to third place. It may be temporary, it may not. But either way, I think savvy developers and real estate brokers will capitalise on this more focused US interest and start marketing to them accordingly,” says Umer Ali, Sales Director at propertytrader.ae.
Yes, there is a rush to get to Canada – the Canadian immigration site crashed recently because of the unprecedented traffic. But Canada can only take so many Americans. That’s why an escape to Dubai might just be some of the options some Americans are considering – especially Arab Americans who feel worried about a Trump Presidency would mean for them.
Nobody really knows how this would play out in the long run, but it’s certainly not bad news for you if you have a home or apartment for sale in Dubai.