The real estate agents indicate another fall in average sold prices of properties in Dubai, UAE, but new buyer enquiries are moving closer to stabilisation, according to a new report.

Relatively cautious investor sentiment, especially among international buyers, remained a key factor weighing on newly agreed prices during the three months to October, stated a survey of the Dubai real estate sector, sponsored by Emirates NBD and produced by Markit.

The real estate agents also noted that global economic uncertainty had a negative impact on recent transaction volumes, it added.

Emirates NBD Real Estate Tracker said October’s survey data paints a slightly less downbeat picture of real estate market conditions than those recorded over the three months to August, with average sold prices reported to have fallen at a slower pace and overall new buyer enquiries moving closer to stabilisation.

The report said strong demand conditions were again a feature of the lettings side of the market over the three months to October. Although slower than earlier in 2015, the latest survey pointed to a robust expansion of new lettings enquires and upward pressure on rental prices as a result.

Commenting on the Emirates NBD Real Estate Tracker, Khatija Haque, the head of Mena Research at Emirates NBD, said: "The survey is consistent with reports of a correction in the residential real estate sector, but the pace of price declines appears to have moderated in the three months to October, compared to the peak summer months."

"There was an improvement in the new buyer enquiries index and the new international buyer enquiries index, particularly for apartments, suggesting there is demand at the right price. Data for the residential lettings market is also encouraging, with agents reporting rental price growth for both apartments and villas in the three months to October," remarked Haque.

The headline Emirates NBD Dubai Average Sold Prices Index registered 28.8 in October, up from 26.7 in August but still below the 50 no-change threshold. Slower declines in average sold prices were recorded for both apartments and villas during the October survey period.

Meanwhile, the index measuring overall new buyer enquiries rose to 48.5 in October, up from 36.3 and the highest reading since April. By property type, a stabilisation in new buyer enquiries for apartments contrasted with a further reduction in new sales leads for villas.

Latest data for international new buyer enquiries signalled a further decline during October, but the rate of contraction eased from August’s low.

Looking ahead, however, Dubai real estate agents are optimistic overall about the prospects for property values over the next 12 months, with 38 per cent expecting a rise against 34 per cent that forecast a reduction. However, the degree of confidence was down since August and remained lower than those reported by households in Dubai.

Reflecting this, the latest survey showed that exactly 57 per cent of households expect a rise in their property value over the year ahead, while only 25 per cent anticipate a decline.  

Real estate agents indicated another upturn in new letting enquiries over the three months to October. At 55, the index was down slightly from 57.7 in August but still well above the 50 no-change threshold. Higher levels of new rental enquiries reflected a robust upturn for apartments (index at 55.9), while for villas the equivalent index dipped to 49.3 in October.

Concurrently, households in Dubai also reported an increase in newly agreed rents during the three months to October. Moreover, just over half (54 per cent) expect a rise at their next rent review, while only 11 per cent foresee a fall, the report added.-TradeArabia News Service