Sale prices of residential property in Dubai will fall by up to 5% in the first half of the year before stabilising in the second half, according to a new prediction by consultancy Deloitte.
Although the fall may dismay property traders, Deloitte says it shows a maturing of Dubai's property market, which is one of the key regional destinations for real estate investment.
"Provided growth continues at sustainable and realistic levels over the medium term, [a levelling off in capital growth] is likely to improve end-user and investor confidence, which will have obvious benefits to the Dubai property market as a whole," says Robin Williamson, managing director, Deloitte Corporate Finance.
Dubai's real estate crash, which coincided with the global financial crisis of 2008, caused widespread investor losses as the prices of some properties halved in a year.
Funds such as the Emirates Real Estate Fund from Emirates NBD Asset Management had to suspend redemptions as investors panicked and sought to withdraw their money.
Up until last summer, there were concerns of another property bubble, with data suggesting residential property prices had risen by more than a third in a year. However, prices stabilised in August.
Deloitte says overseas investors will continue to buy property in Dubai but says transaction volumes may fall because of increasing stability in Egypt and financial constraints in Russia.
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