Dubai: After months of decline, Dubai’s property market is finally showing signs of recovery, with recent house prices indicating a possible bottoming-out.
According to consultancy firm ValuStrat, the prices for villas and flats in 26 locations it regularly monitors did not post “significant change” in February 2016, further supporting claims that the market has stabilised.
For the eight months between July 2015 and February this year, real estate values in places like Dubai Marina, Jumeirah Lake Towers (JLT), Emirates Hills, The Meadows and Jumeirah Village hardly moved at all. Some areas still registered price declines but the changes were barely noticeable.
Locations that mostly cater to the middle-end market, such as International Media Production Zone, The Greens and Motor City, even witnessed some price upticks.
“As far as the freehold villa market is concerned, the levelling off started in October last year where most of the locations saw no change in their prices, and The Lakes and Jumeirah Islands saw less than 1 percent dip,” Haider Tuaima, ValuStrat head of research told Gulf News.
The positive signs could have something to do with the increase in investor interest during the past several months, when properties offered attractive rates.
“For the last eight months, early bird property investors have been seeking good properties in sought-after locations that potentially provide them with attractive yields and/or capital appreciation at relatively low entry points,” said Tuaima.
“It’s no longer a matter of ‘if the market recovers’, rather it’s a matter of ‘when the market recovers’, and with this in mind, many end-users are moving to reduce their high annual rents by replacing that with easier monthly mortgage payments.”
Property sale prices, as well as rents, had been on a decline for months on the back of slowing real estate transactions. Analysts had attributed the trend to the lack of demand for luxury properties, falling oil prices and strengthening of the US dollar.
The ValuStrat Price Index (VPI) registered 98 index points in February, compared to a 100 point base in January 2014, which means that there has been no significant change in property values.
“This marks a continuation of evidence of price stabilization,” the company said in a statement.
The index represents the monthly price change in freehold residential units spread across 16 apartment locations and 10 villa locations in Dubai.
ValuStrat’s data showed that for eight months, or between July 2015 and February 2016, prices in Dubai Marina only changed from Dh1,403 per square foot to Dh1,402 per square foot.
In JLT, most apartment prices moved slightly lower from Dh1,259 to Dh1,254 per square foot during the same period.
“And for the first 20 months, International Media Production Zone, The Greens and Motor City saw upticks of 1 to 2 per cent,” said Tuaima.