Phidar Advisory, a Dubai-based advisory company, claimed in a recent report that property prices and rents on Dubai’s residential market continued to decline in the third quarter of 2016 and might drop further throughout 2017.

In its end quarter research note on the Dubai residential market, the company showed that apartment lease rates declined by 3.4% in Q3, with sales prices declining 4,1%. Declines were also noted in the villa sector.

Phidar blames most of the decline on a supply-demand discrepancy, with the report claiming that the majority of new supply is tailored for “mid-high to high-income households” while companies in fact mostly hire junior and mid-level position staff, which usually cannot afford the higher priced property.

The report also noted that since the market has slowed down and construction usually tends to get delayed during market lulls, a lot of projects might be rescheduled from 2016 to 2017, thus extending the decline into 2017 by continuing the supply-demand mismatch.