New data from U.A.E.-based property firm Cavendish Maxwell shows Dubai house prices fell to their lowest levels in June, not seen since the 2008 financial meltdown.
Cavendish Maxwell's Dubai House Price Index via Property Monitor shows single-family house prices dropped 15.3% YoY this June, compared to a 9.2% annual decline recorded in January 2019.
According to the House Price Index, the average house/townhouse price decreased to $1,197,944.00, and the average apartment price remained steady at $462,842.00 in June. House prices in the three months leading up to June were 4.5% lower, compared to the previous quarter.
As of June 2019, apartment and house/townhouse prices plummeted 21.4% and 22.4% respectively, compared to their prices of $571,735 and $1,524,628 in September 2015.
The rapid decline in Dubai home prices began last May, just when the trade war between the US and China started to intensify. Then in late 3Q18 through 4Q18, crude oil collapsed by almost 40%, further weighing on Dubai's local economy.
However, global macro deterioration, trade wars, and worsening geopolitics across the region weren't the only factors contributing to Dubai's housing bust.
There has been non-stop construction for the more than 8 million foreign expats who live and work in the city. This has created a massive housing glut that is now coming home to roost, sending prices spiraling lower to levels not seen since August 2008.
"The annual decline in house prices was more pronounced in communities such as IMPZ, Arabian Ranches, Emirates Living, Discovery Garden, and Dubai Silicon Oasis, where house prices declined by more than 16% on average," said the firm.
The tree-shaped Palm Jumeirah island has seen prices drop 14% YoY in June. Even Dubai Marina, an affluent residential neighborhood overlooking a port of mega yachts, has seen prices fall 13.5% since. Here are other communities experiencing a downturn in prices:
Discovery Gardens home price -18.6% YoY in June
Emirates Living home price -16.3% YoY in June
Arabian Ranches home price -16.3% YoY in June
Jumeirah Island home prices -15.9% YoY in June
Duabi Land home price -15.2% YoY in June
Jumeirah Village Circle home price -14.7% YoY in June
It appears a housing bust has been unfolding across Dubai for some time. A record number of residential units are expected to come online in the 2H19 will push Dubai property prices even lower. The bust is expected last through 2020.