While average asking prices have continued to fall (by around 24% in Q2). The rate of decline in achieved prices has been lower at just -6% resulting in a convergence between asking and achieved prices. There has also a lower rate of rental decline than before, with the average rent for two bedroom apartments falling by 15% in Q2, compared with a 22% decline in Q1 2009.
New
residential supply continues, with 22,400 residential units expected to be handed over in 2009, in spite of over $24 billion worth of residential projects being put on hold or cancelled.
On the demand front, transactional volume remained stable between Q1 2009 and Q2 2009 in comparison to the 58% decrease between Q2 2008 and Q2 2009.
Craig Plumb, Head of
Research at Jones Lang LaSalle MENA added:
“The stabilisation of transactional volumes is an important indicator, which reflects improved confidence among investors. The narrowing gap between asking prices and achieved prices is a further indication that the market is beginning to stabilise, albeit at significantly lower levels of pricing than those seen earlier in the year."
“While there have been a large number of projects delayed or cancelled, there remains a significant level of new supply, with around 22,400 residential units expected to be completed across Dubai in 2009.”