Mid-market freehold communities in Dubai are showing marginal price recovery compared to high-end areas, according to a new report.
The latest Reidin-GCP data shows property values registered slight gains in mid-market communities such as Discovery Gardens and International City, while price stability was reported in high-end communities such as Palm Jumeirah and Dubai Marina.
In the year-to-date, apartment values are down 0.5 percent against 2015, while villas are 0.5 percent higher, Gulf News reported.
“Transactions are rising not only in the mid-end but also at the higher end. The high-end cluster price drops have moderated quite a bit,” Sameer Lakhani, managing director of Global Capital Partners, told the newspaper.
In October this year, Phidar Advisory said property prices continue to decline throughout 2017 as slow demand growth delays any recovery in values.
“Slow demand growth remains the immediate barrier for price recovery,” said company managing director Jesse Downs said.
The Reidin-GCP said mortgage transactions have doubled in a span of four years.
“Historically, the market used to heavily dependent on cash transaction, with mortgages only accounting for 25 percent of entire activity. However, in the last four years there has been a shift away from cash transactions and towards mortgages, where the latter now accounts for nearly half of all activity. This shift can be attributed towards an increase in home ownership, refinancing from existing owners to extract liquidity and investors taking advantage of capital structures,” it said.
The report also added that only 18 percent of Dubai’s working population was taking home over $2,725 (AED10,000) a month - the minimum salary limit for taking a mortgage.
“But in the 10 years from 2005, the population has seen a swelling in the ranks of white-collar professionals (by 48 per cent) and in the managerial class (by 87 per cent). More of them could provide a boost for Dubai’s property market, from a rental and sales perspective,” it said.
Dubai’s population as of September 2016 is estimated at 2.56 million. Annual population growth rate was 5.6 per cent in 2015, Gulf News reported.
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