Dubai has seen a decline in the value of property projects over the first three quarters of 2019.
The value of projects underway in Dubai has fallen by $10.9 billion in the first nine months of the year, according to research by GlobalData.
The slowdown in Dubai’s project sector has accelerated in 2019 as the total value of construction and transport project contract awards failed to keep pace with the large volume of projects being completed.
Data from Middle East projects tracker MEED Projects shows that around $1.22 billion of construction and transport contracts were awarded in Dubai during the third quarter of this year.
Over the same period there, some $6.68 billion worth of projects were completed in the emirate.
This leaves a net loss in the value of construction activity underway in Dubai of $5.46 billion.
The third-quarter fall in activity follows a similar fall during the second quarter of this year when there were $1.5 billion of construction and transport contract awards and $6 billion of contracts completed giving a $4.5 billion net decrease in construction activity.
The decline in the second quarter was the first time that the market has recorded a loss exceeding $2 billion since 2011, when Dubai was still struggling with the aftereffects of the global financial crisis.
Colin Foreman, Deputy Editor at GlobalData, said: ‘Dubai’s construction sector runs to stand still. It needs new projects to replace the ones it completes. In 2019 there is the double whammy of fewer projects moving into construction and a large number of projects being completed ahead of Expo 2020.
Dubai’s residential market is set to see further softening for the remainder of this year. During the third quarter of 2019, apartment and villa sales prices were down 4 per cent and 3 per cent respectively.
However, rental rate declines show signs of slowing down with a decrease of just 1 per cent, so overseas property investors could enjoy higher rental yields.