Residential property prices have been dropping in Dubai for the last four years, so is it now time to buy in Dubai?
According to consulting company ValuStrat, Dubai residential properties have seen their capital values decline by 20 per cent since the market peak of mid-2014.
However, these declines in property capital value have led to an increase in sales as overseas property investors start to buy in Dubai, and the average sale price has increased as investors find that they can buy bigger.
Quarter two of this year showed an annual decline in capital values of 6.7 per cent, and a quarterly decline of 3.8 per cent, but many experts feel that the property market has neared the bottom and now could be the perfect time to buy in Dubai.
Off-plan property sales volumes are up by 10.9 per cent year-on-year, and up by a huge 18.7 per cent quarterly. The number of existing properties sold is also rising, up by 1.5 per cent year-on-year and 10.2 per cent quarterly.
Many established areas in Dubai have seen off-plan sales rocket, including Business Bay at 86 per cent of all sales being off-plan, Downtown Dubai at 70 per cent and Jumeirah Village 65 per cent.
Average property sale prices have also risen, as buyers aim higher for more desirable properties. Off-plan sales recorded a 5.6 per cent quarterly increase to Dh1.4 million, while existing properties rose by 23.9 per cent to Dh1.9 million.
Haider Tuaima, head of real estate research at ValuStrat, said: ‘Recently announced government incentives towards investors and record low prices seemed to have encouraged the quarterly double-digit growth of residential homes and office space transactions. This is despite the fact that Ramadan fell in the second quarter this year, typically not a very busy time for real estate deals.’
So is it now time to buy in Dubai? Managing director and group head real estate, Declan King, said: ‘Second quarter increases in transaction volume and ticket sizes for residential properties is noteworthy. However, it is far too early to say whether this is a one off statistical event or an emerging trend of improved buyer sentiment and market demand – on the back of significant price reductions.’