Dubai house prices in the first quarter of 2016 have slumped by 10 percent over the past year, with rental values down by 5 percent, according to a new report.

Real estate consultancy JLL said in its Q1 2016 Dubai Real Estate Market Overview report that most property market segments continued to soften in Dubai.

It added that the long term outlook still remains positive due to future growth drivers.

JLL said 2,200 residential units have been added to the Dubai market over the past 12 months, taking the total stock to 458,500 units. These include a range of apartments, villas, as well as town houses across the emirate.

The report said the property sales price decline could be attributed to factors including the strengthening of the US dollar and the adverse market conditions on a regional front owing to the declining oil prices.

Craig Plumb, head of research at JLL MENA, said: “Various factors are bringing the market towards the bottom of its cycle. On one hand, the strong dollar is impacting the USD pegged GCC currencies which is making Dubai real estate more expensive for buyers from non-USD pegged markets.

“On the other hand, the continued period of low oil prices is tightening regional liquidity which is also affecting the real estate market.

“We are witnessing a continuing decline in the sales and rental indexes for both the Dubai residential and hospitality sector.

“While the short to medium term outlook for the Dubai real estate market is less encouraging, we remain positive on the long term outlook due to future growth and demand drivers like the Expo 2020 and other mega infrastructure developments.”

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