Dubai house prices hit lowest level in a decade; sales of ready homes double
House prices in Dubai have hit their lowest level in a decade and almost halved since the real estate boom, as worries about the coronavirus pandemic continued to take the steam out of the real estate market, according to the latest figures.
However, sales of ready-to-occupy units have more than doubled since the new norm of social distancing and stay-at-home culture has emerged, indicating a huge pent-up demand.
The prices of apartments and villas in the emirate stood at 896 UAE dirhams per square foot in September, marking the lowest point since 2010, when prices averaged 898 per square foot, the latest data compiled by ValuStrat showed.
Today’s home prices per square foot are also a bargain, a far cry from the heights of 1,950 dirhams hit during 2008, prior to the global 2009 recession.
As for residential capital values, Dubai registered an average of 66 points in September 2020, down by 41 percent from 112.9 points in 2014 and by 14.5 percent from last year.
“There is no doubt that residential capital values in many locations are very close to, or have already reached, record lows for the last decade,” ValuStrat said in its latest report.
The property market has not been spared from the impact of the health outbreak, with home prices and rents declining since the onset of the pandemic, and overall transaction activity still lower than last year.
Real estate professionals in the Middle East and North Africa (MENA) region have recently said that it might take up to two years before the market recovers completely, although some of them expect to see signs of improvement within the next six to 12 months.
Latest figures
According to ValuStrat, the property market in Dubai is showing a V-shaped recovery in terms of sales, but capital values across the city continue to fall.
It noted that the third quarter of 2020 alone saw ready home sales volumes surged by 159.7 percent when compared to the previous quarter.
“While there is an obvious V-shape trend in terms of sales, citywide capital values are yet to stabilise, as the downward trend continues, albeit, at a slower pace,” said ValuStrat.
All the properties monitored by the firm saw capital values declined by as much as two percent monthly. The least registered capital value declines were found in Arabian Ranches, Jumeirah Lakes Towers and International City.
Cash sales
In terms of sales, ready homes captured the biggest chunk of the transactions, accounting for 53 percent, while off-plan units represented 47 percent of the purchases.
Compared to August, September’s ready home transactions also jumped by 113.8 percent, positioning the third quarter of 2020 as the best quarter in terms of ready home transactions sales volume since 2012.
However, since there were fewer project launches, the off-plan home sales during the third quarter fell 5.2 percent quarterly and 47.6 percent annually.
