Dubai, UAE: In an official communiqué, KPMG has said that it has released a “Building Confidence” report — a review of Dubai’s residential real estate market — which reportedly predicts that while 2016 may be a challenging year for Dubai’s residential real estate sector in the short term due to a number of internal and external factors, the market should see an upturn in 2017.

According to KPMG, the statistics from Dubai Land Department indicate that there was a decline in the number of residential units sold between January 2014 and November 2015.

Kaushal Dayal, Director at KPMG’s Management Consulting  practice

The communiqué also said that while certain areas were more impacted than others in terms of declining prices for the residential real estate market, the overall magnitude of the decline had been tempered. KPMG suggested that this was a result of vastly improved regulations within Dubai’s real estate sector. It also pointed out that affordable housing areas had incurred lower declines and, in some cases, even maintained value or rental yield.

Sidharth Mehta, Partner and Head of Building, Construction and Real Estate with KPMG Lower Gulf, said, “While oil prices remain well below the long-term average, which is clearly having an effect on market confidence, Dubai’s improved regulatory environment, broader investor profile and increased maturity are all indicators that its real estate market should eventually self-correct.”

Seconding this, Kaushal Dayal, Director with KPMG’s Management Consulting practice, said that a number of measures, such as the Real Estate Regulatory Agency (RERA), the introduction of mortgage caps and the establishment of the Al Etihad Credit Bureau had “mitigated a lot of uncertainty in the market – even in the face of falling oil prices, currency fluctuations and geo-political uncertainty”.