Dubai real estate to fluctuate with new supply, Landmark says

Dubai real estate prices will see further price fluctuation after a temporary period of stabilization as new residential units come onto the market, according to a study by Landmark Advisory.

Rents in the United Arab Emirates’ commercial hub showed signs of stabilization in June and July, with rental prices in the Dubai Marina increasing by at least 6 percent, Landmark, a Dubai-based consulting firm, said today in an e-mailed statement.

“The large amount of rents ending during the same period ultimately creates a temporary supply distortion following a period of particularly strong demand,” Charles Neil, chief executive officer of Landmark Advisory, said in the statement. “Many landlords have removed inventory from the market to avoid renting out at current market rates, while others may be out of town during the summer period and consequently unavailable,” he said.

Dubai, the second-biggest of seven states that make up the UAE, has been hurt more than others by the financial crisis as banks cut back on mortgages and speculators flee. Within a year, Dubai went from being the fastest-rising of 46 markets monitored in the Knight Frank global house-price index to the second-biggest decliner after Latvia.

The Islamic holy month of Ramadan, which began August 21, will also affect the leasing supply as many landlords stall the debut of new residential units until the holiday ends, Landmark said.