The United Arab Emirates central bank stated in a report that prices have been falling quarter-on-quarter almost continually since the start of 2017 because of a worsening supply/demand balance.
The central bank quoted the REIDIN residential sales price index, which showed prices falling 2.5% from the previous quarter in July-September.
Residential real estate prices in neighboring Abu Dhabi, the other big emirate in the UAE, dropped 6.1% percent YoY in the third quarter after a 6.9% slide in the second quarter. One factor which is weakening the demand for real estate is subdued employment growth in the UAE, especially among white-collar workers who might buy homes.
Most jobs in the wealthy oil-exporting country are held by foreigners.
Total employment grew just 0.6% from a year ago in the third quarter—the slowest rate in over four years—after a 1.2% growth in the second quarter, according to the central bank. In the first nine months of 2018, employment grew at an average rate of 1.6% against a 2.6% increase in the same period of 2017.
The central bank figures showed employment in sectors including construction and real estate continuing to expand, partly because of Dubai’s preparations to host the Expo 2020 world’s fair. Employment in some sectors that generate large numbers of white- collar jobs, such as services, fell in the third quarter, which in some cases was their fastest rate for several years.
The UAE government last week initiated an effort to bolster white-collar numbers by announcing a scheme to offer long-term visas to wealthy property investors, senior scientists and entrepreneurs.
However, eligibility for the visas is tightly restricted and they do not offer a path to UAE citizenship, so analysts said the scheme might do little by itself to change employment or real estate market trends.