Residential property prices in Dubai have fallen by more than 11% over the past year, says ValuStrat
Residential property prices in Dubai have fallen by more than 11 percent over the past year although the rate of declines is slowing, according to new research.
Consulting firm ValuStrat revealed that its third quarter ValuStrat Price Index (VPI) fell by 11.2 percent annually, with quarterly declines decelerating to 2.6 percent.
This downward trend resulted in a 31.1 percent citywide capital value loss since the peaks of mid-2014, ValuStrat said, adding that all established freehold locations monitored by the VPI witnessed price drops since the last quarter, ranging from 1.8-4.5 percent.
On an annual basis, three out of 26 locations were more resilient to downward pressure and saw single-digit declines - villas in Palm Jumeirah and Emirates Hills, as well as apartments in Dubai Sports City.
Capital values dropped more than 15 percent annually for apartments in Discovery Gardens, and Dubai Production City.
“Residential capital values per square foot approached 2012 levels prompting 40 percent annual rise in off-plan sales and 34 percent growth in ready home sales,” said Haider Tuaima, head of real estate research at ValuStrat.
The rental VPI, which monitors 16 apartment and 10 villa locations within Dubai’s freehold market, stood at 72.6 points, declining 27.4 percent since 2014, softening 1.7 percent quarterly and 7.9 percent annually.
ValuStrat added that Dubai’s net yields averaged 5.9 percent, while the average residential occupancy rate stood at 86 percent.
As far as residential supply is concerned, 12,948 residential units, 37 percent of the total estimated supply for 2019, have been completed so far. More than half of these completions were concentrated in four areas - Dubailand, Jumeirah Village Circle, Dubai Marina and Dubai Silicon Oasis.
"With improved transaction volumes in recent months, it will be interesting to see what buyer demand developers find at this week’s Cityscape Global event in Dubai - and if this trend continues over the remainder of the year," said Declan King, managing director and group head real estate, ValuStrat.