Dubai’s residential market is on the verge of an “imminent” increase in prices as a result of improving economic conditions and a relatively stable supply, according to a new Reidin/Global Capital Partners report. The study, A Tale in Three Markets, says that recent trends in equity and oil markets and the limited supply of new completed units all point to a citywide increase in property prices in the near future. The report states that there has traditionally been little correlation between oil and property prices, but this has changed in the past six months as concerns over the former’s effect on property prices has amplified their effect on the market. It also said that there is usually a “modestly positive” relationship between equity markets and housing markets but, despite a 25 per cent increase in the value of the Dubai Financial Market index from recent lows earlier this year, house prices have remained flat. Sameer Lakhani, the managing director of Global Capital Partners, says that a reversion to historical means is likely to occur in both cases by an increase in house prices – especially as developers have been restrained in terms of releasing supply. He said that during the last crash, the market faced a “perfect storm” of a complete lack of demand and a huge oversupply. More than 60,000 units were launched in 2007 and more than 40,000 in 2008. As a result, more than 60,000 units were completed in 2008, and a further 30,000 or so per year continued to flood the market in 2009-10 during a major slump. In the most recent cycle, launches and completions have been lower. Fewer than 40,000 units were launched at the most recent peak in 2014. This halved to 20,000 last year and is likely to be lower again this year, Mr Lakhani said. The number of completions has remained at – or below – about 20,000 since 2011. “There’s a perception issue and there’s a data issue,” he said. He said the perception of oversupply occurs because master developers often state their intention to deliver thousands of homes when announcing a project, but they have become better at pacing delivery to match demand. “For example, Nshama has said it is going to be a 30,000-unit community when it is complete. Has Nshama actually launched 30,000 units? No – they’re not even close. They’ve launched, I think, barely 3,000. “This time around, they [developers] are more responsive. If they see a market that is softening, they pull back not only in terms of the number of units but also the number of units they are completing.” He said there have been shortages – and price rises – within mid-income communities for a few months and that soon, a citywide increase is likely as demand picks up on the back of an improving economy. Overall, experts remain divided on the current prospects for Dubai’s property market. Many, such as JLL’s Craig Plumb and Dubizzle, have said that the market has shown signs of bottoming out, with no significant price declines in recent months. Mr Plumb has stated that a recovery in prices likely to begin either late this year or by early 2018. But Phidar Advisory remains pessimistic. It has said that demand for new homes from both investors and owner-occupiers remains weak despite the lower supply. It has predicted that prices are likely to continue declining throughout 2017.