Real estate agents in Dubai have indicated a subdued end to 2015 for the Dubai property market, with nearly half expecting a further fall in values during this year.

A majority of respondents to the Emirates NBD Real Estate Tracker noted declines in new buyer enquiries and transaction numbers over the three months to December.

The latest drop in new buyer enquiries was the sharpest since the survey began in April, which real estate agents linked to weaker investor sentiment and muted underlying market conditions.

Looking ahead, around 47 percent of real estate agents said they expected a fall in Dubai property values over the course of 2016, while 32 percent forecast a rise.

Survey respondents noted that market conditions would favour buyers over the next 12 months, as construction volumes look set to remain strong while the uncertain economic outlook has acted as a brake on investor demand.

December’s survey also indicated weaker trends on the lettings side of the market, with new rental enquires falling for the first time since the survey began in April.

This in turn contributed to a slight drop in new lettings activity at the end of 2015, alongside the slowest rise in newly agreed rental prices in the short survey history.

Khatija Haque, head of MENA Research at Emirates NBD, said: “The survey is consistent with recent data on residential sales and lettings prices in Dubai, which show prices continuing to ease. However, the momentum of price decline has moderated in December. The strong US dollar and low oil prices are likely to remain headwinds for the real estate sector in 2016.”

The proportion of Dubai real estate agents reporting a fall in average sold prices (55 percent) continued to exceed those that indicated a rise (21 percent) during the three months to December.

Although the headline Emirates NBD Dubai Average Sold Prices Index remained below the 50.0 no-change threshold, the latest reading was 32.6, up from 28.8 in October, to signal the slowest pace of decline since June.

Survey respondents indicated softer falls in property values for both apartments and villas at the end of 2015. Transaction volumes were also reported to have dropped at a slower pace during December.

However, real estate agents indicated that new buyer enquiries decreased at the steepest pace since the survey began in April. This was despite a softer fall in new sales leads from international buyers. Anecdotal evidence suggested that the uncertain economic outlook had weighed on demand in December.

Real estate agents signalled a marginal decline in new letting activity during the three months to December, with stable demand for apartments offset by a marked drop in the number of villa rentals.

At the same time, Dubai households reported the slowest rise in rent renewal prices in the short survey history. People living in apartments were more likely to report a rise in their rental price than those living in villas.