Firm expects market to return to growth in 2016-2017 as Dubai gears up to host EXPO 2020 - says price declines will be temporary

Research shows market peaked in Oct. 2014, at levels higher than 2008 boom

Prices in office sector to remain stable - with steady growth opportunities

DUBAI, 08 June 2015

Core Savills, the largest commercial lease transaction and one of the leading international real estate companies in the UAE, is optimistic on the outlook for the Dubai real estate market. Research released today by the firm has suggested declining apartment and villas prices in the emirate since the market peaked late last year will stabilize during 2016 and return to growth later in the year or in 2017.

According to Core Savills, recent data suggests that Dubai's real estate market peaked in October 2014 at levels higher than those achieved in August 2008, and that Dubai's residential sales market has softened steadily by a compounded average of 1.2 per cent per month for apartments, and 0.7 per cent for villas since then.

The firm, however, expects a return to growth as Dubai gears up for EXPO 2020, and has welcomed the drop in prices as a healthy and positive market adjustment after the strong growth numbers which were posted in 2014.

In the report, buyers looking to enter the market are advised to focus on the right product prices at today's market level, and to expect reasonably higher rental yields with capital appreciation to follow in the mid- to long-term.

Citing reasons for the softening prices, the Core Savills report mentions several external factors such as regional instability issues, global macroeconomic concerns. In particular, a Chinese crackdown on capital outflows, Russian sanctions and the falling ruble, the appreciating dollar and overall Euro Zone issues are mentioned as making their mark on Dubai's residential market. The steady nature of the price correction, however, is touted as a sign that Dubai's real estate sector is maturing thanks to investors with longer term vision and a market that overall is deeper than 2008. For these reasons Dubai is in a better position today to absorb external economic shocks than it was in 2008.

Taking a closer look at the office space sector in Dubai, the research shows the sector will remain stable, with a steady growth forecast and greater choice for tenants as the city continues to be well positioned to offer companies a competitively priced choice for investment and growth.

Since Dubai is viewed as a great place to do business, Downtown and the DIFC are now considered by many to be the unified central business district for the entire region and foreign companies are still happy to pay a premium to open offices in these prime locations. This is resulting in extremely low vacancy rates in the sector.

Commenting on the research, David Godchaux, CEO of Core Savills said:
"Our most recent report comes after deep analysis of different segments of the real estate market. It aims to give our clients research-backed advice to guide their rental and investment and decisions, and to inform landlords and tenants on market movements in key areas. Through our research, we are confident that the residential sales market will return to growth during 2016 after a period of healthy price decline. An adjustment, however, does not mean crisis - on the contrary, a healthy softening is what Dubai really needs to give renewed confidence to long term investors that the real estate market has matured and gained more depth and liquidity."

-Ends-

For an interview with David Godchaux or more information on Core Savills' H1 Dubai Property Spotlight please contact:
DABO & CO
Johan Janssen
Email: johan.j@daboandco.com
Tel: 00971501077359

About Core Savills:
As one of the largest UAE property services firm, Core Real Estate, the Savills associate, combines unrivalled local market insight with the international strength provided by 600 global offices.

As a full-service real estate business, working with occupiers, investors and developers of residential and commercial real estate in Dubai and Abu Dhabi, we provide integrated expertise across all property sectors, including; offices, prime residential, international residential, retail, hotels, and industrial and logistics.

© Press Release 2015