Investing in Dubai Property – Seasonal slowdown seen

A report released yesterday said Dubai Real Estate is witnessing a seasonal slowing in price appreciation.

The residential property investment market recorded a 1.6 per cent month-over-month gain in June, which indicates a slower price appreciation compared to the four point four percent in April and three point five per cent recorded in May. The report came from Al Mal Capital’s “Real Estate Monthly Report” for June.

“There is a seasonal slowdown relative to the last few months where prices increased over three per cent. However, I expect that we will see a further pick up in the pace of price appreciation in the fourth quarter this year which is a seasonally strong time of the year,” said Robert Mckinnon, Managing Director, Equity Research for Al Mal Capital.

“The summer this year however continues to be stronger than last year, which saw a mere 0.6 per cent increase this time last year,” he added

Commercial real estate in Dubai recorded a slightly higher appreciation than the residential market since last year. While the commercial properties in Dubai grew by 42.7% year-on-year, the residential segment grew by a marginal difference at 40.8% for the same period, said the report.

Rental yields declined in June to a median rental yield of 6.8% compared to 6.9% in May owing to higher property prices even as median rents have been relatively flat the last three months. For commercial properties, the median rental yield also declined marginally to 12.4% in June from 12.8% in May.