Rate of Dubai property price declines slows to 16-month low

The rate of falling Dubai property prices slowed to its lowest mark for 16 months in October, signalling the possibility of values nearing their bottom following years of declines.

According to new research from consultants ValuStrat, residential values in the emirate dipped by just 0.7 percent, the lowest rate since June 2019.

It said this rate of decline has continued to decelerate from 1.9 percent during the April-June lockdown restrictions.

Annually, residential capital values declined 14.4 percent, it added.

ValuStrat said citywide prices are yet to stabilise, as the downward trend continued, albeit, at a slower pace.

The real estate sector has already been battling sluggish market conditions long before Covid-19 arrived.

It noted that while the third quarter of 2020 witnessed a V-shape trend in sales transactions, the first month of Q4 registered a 33.7 percent decline in off-plan sales and 6.8 percent decline in ready home sales when compared to the previous month.

All properties monitored by the VPI saw capital values decline by as much as 1.3 percent monthly, examples of which were apartments in Dubai Sports City and Dubai Production City.

"Given the high demand due to record low prices, larger villa capital values demonstrated higher resilience as compared to apartments. The least registered capital value declines were found in Arabian Ranches, The Meadows, Emirates Hills and Palm Jumeirah," the ValuStrat research said.

Properties developed by Emaar, Nakheel, Sobha, Dubai Sports City, and Damac topped the sales charts overall. Top off-plan locations transacted during October were in Sobha Hartland, Dubai Creek Harbour and Jumeirah Village.

Most transacted ready homes were Dubai Marina, Jumeirah Village, Business Bay and International City.

The latest report follows one last month that said property prices in some parts of Dubai reached new decade-long lows in September.

The annual average price per sq ft fell to AED896 for 2020, AED2 lower than the previous low seen in 2010 following the global economic crisis.

It added that 61 percent of October’s cash-based sales transaction volumes were towards ready homes, as off-plan sales have slowed due to limited project launches.