Dubai; Dubai’s realty market continues to confound prospective investors as to when they ought to be buying as residential values soften and are likely to drop further through the rest of the year, according to new updates by leading consultancies.

Similar doubts are being sowed in the mind of potential sellers who are looking to make an exit, and the last thing they would want to see are likely buyers sitting out until prices turn further in their favour.

While asking prices of villas were the first to show a dip — brought on by a glut of launches — the decline in apartment values have now overtaken the former, according to JLL, the consultancy.

‘The market is expected to continue to see a downward trend in prices over the second half of the year and into 2016,’ the report notes.

‘Residential transactions registered with the Dubai Land Department show a 66 per cent decline in aggregate value and a 69 per cent decline in the number of transactions in the first-half of the year compared to the same period in 2014,” said Craig Plumb, Head of Research at JLL MENA.

‘H1-2015 saw a total of 7,400 deals transacted (compared to 23,800 in H1-2014), with a total value of Dh12.7 billion. These levels of decline in transaction activity have resulted in a single digit decline in sale prices, contrary to the major declines seen in 2008-2009, reflecting signs that Dubai’s market is maturing.’

While the market reaches a stage of maturity, buyers are more than likely to play the waiting game. It is up to the developers and individual investors holding assets to do the running and get buyers to sign on dotted lines. Already, fairly sizeable discounts are being offered on prime off-plan properties in the second market, at levels of anywhere from 5-15 per cent of the purchase price.

About 12,000 homes were handed over in the second quarter, raising overall stock in Dubai to 379,000 units. JLL estimates that another 16,000 could be in line for completion through the rest of the year — ‘However, with the market expected to face further declines, we may see projects delayed into 2016 and beyond.’

Thus it would be up to individual master-developers and some of the bigger private developers to control the pace of new deliveries and thus hope some demand-supply equilibrium will be reached … sooner than later.

So, where are the locations with the best ‘bargains’ to be had on completed properties or prime communities?

“Prices in The Springs have dropped the most in Q2-2015 (6 per cent) as well as over the last 12 months (16 per cent),” according to estimates put out by the realty advisory firm Cavendish Maxwell. “Although rental rates and occupancy levels are stable in this community, new buyer demand has been shifting towards secondary villa locations such as Jumeirah Village Triangle, Green Community and Al Furjan as buyers look for more value for their money.

“Jumeirah Islands recorded the lowest decline of 5 per cent over 12 months (Q2-2014 to Q2-2015), whilst areas such as Jumeirah Village Triangle declined at 14 per cent within the same period.”

Of the many high-rise clusters, the pace of value decline was sharpest at “established locations such as Downtown Burj Khalifa, The Views and The Greens” during the second quarter as compared to the first. Units at some of the recent tower launches are featuring prominently in estate agents’ “discount sales”.

“Prices declined by 4 per cent in established areas such as Dubai Marina, Jumeirah Beach Residences and Downtown Burj Khalifa, whilst properties in peripheral areas such as International City declined by 14 per cent,” the Cavendish Maxwell report adds. It is interesting that International City gets a mention, because up until now prices there had been relatively resilient to any downward pressure.