The United Arab Emirates, sometimes known as the Emirates or the UAE, is a country in Western Asia. It is located near Oman and Saudi Arabia and is known for its many points of interest. When visiting the UAE, one has the chance to travel to many luxurious places such as the capital (Abu Dhabi), as well as Dubai, Sharjah and many more. Many people particularly enjoy visiting the Burj Khalifa and the Burj Al Arab, because both sights showcase the immense wealth on show in the UAE. As of late, however, things seem to have declined in the UAE. This point is certainly true in relation to property prices, which seem to be falling. Let us, hence, briefly look at the fall in property prices and any potential reasons for the fall.
In the first quarter of 2019, house prices in Dubai fell by 5% year-on-year. This is the 17th consecutive quarter of falls. This is potentially due to things such as low economic growth, low investor sentiment and an oversupply of housing in the area, as well as many other factors. Furthermore, it has been argued that these prices are going to continue to be low, thus showing the volatile nature of the housing market in Dubai.
One new legislation that has impacted house prices in Dubai is the Federal Mortgage Cap. The implementation of this cap has led to a slower rate of appreciation in Dubai and Abu Dhabi. This has, in turn, contributed to the fall in property prices and a fall in economic growth. Nevertheless, the UAE continues to flourish as an economy, despite property price falls.
In conclusion, these are just a few reasons for the fall in property prices in the UAE. In the short-term it seems that prices will continue to fall, but people are uncertain as to what will happen in the long-term. Let us simply hope that the country remains stable, so that it can continue to be one of the world’s best tourist destinations.