Dubai house prices to fall by up to a fifth

Dubai villasResidential property prices are likely to fall between 10-20% due partly to a decline in buyers from countries such as Russia.

The fall in foreign buyers come alongside a spike in home building, with data provider Reidin anticipating more than 20,000 new units will be completed this year, almost twice the average in the last three years.

“Slightly lesser demand will come from non-residents,” says a statement from ratings agency S&P, which made the predictions. “In early 2015, for instance, non-resident demand from Russia and other member countries of the Gulf Cooperation Council was particularly subdued.”

Dubai, which saw property prices roughly half during the 2008 financial crisis, is often seen as a barometer of real estate trends in the surrounding region. Many regional investors are heavily exposed to real estate, some of whom choose to invest in property because it is sharia-compliant.

The predictions from S&P refer to the remainder of this year and early 2016.

©2015 funds global mena

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