DUBAI: Dubai residential property prices fell 10 per cent in the first three months of the year because of a strong dollar and as buyers had less cash to spend following the oil price slump, industry consultants JLL said in a report on Tuesday.

The Dubai real estate sector has softened since late 2014 after a three-year boom fed by an influx of cash from politically unstable Arab nations.

But tougher borrowing regulations and higher transaction fees helped cool the market, with sales volumes slumping last year along with prices.

That trend has continued into 2016, JLL notes, estimating apartment and house prices fell by 10 and 11pc in the first quarter year-on-year. Rents dropped 5pc over the same period.

On Monday, the chairman and foun­der of Emaar Properties , builder of the world’s tallest tower and Dubai’s biggest developer, revealed he was “really scared” of market conditions coming into 2016.

The UAE currency is pegged to the dollar, which has gained significantly against various currencies over the past year including the pound, euro and Indian and Pakistani rupees, making Dubai property more expensive for buyers from these markets and who are historically among the biggest investors.

“The continued period of low oil prices is tightening regional liquidity which is also affecting the real estate market,” Craig Plumb, JLL MENA Head of Research, said in the report.

Published in Dawn, April 20th, 2016