Dubai property prices fall to 7-year low, sales rise to record high

November 2019 property prices fell to $243.67 (AED895) per square foot, while off-plan registrations soared to 5,025

Dubai property prices fall to 7-year low, sales rise to record high [representational image]
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Dubai property prices fall to 7-year low, sales rise to record high [representational image]

Property prices in Dubai fell to $243.67 (AED895) per square foot on average, while property transactions marked the strongest month for sales in a decade in November 2019, according to the Dynamic Price Index (DPI) from Property Monitor, the UAE’s only data platform backed by property professionals accredited by the Royal Institution of Chartered Surveyors (RICS).

The DPI is a real estate market index family, which covers property price movement in Dubai across 42 geographic communities and is indexed to a base period of January 2008.

In Dubai, the index value for November 2019 decreased 11.63% year-on-year to 124.9, which is 1.35% lower compared to its value in October 2019.

Property values are now at their lowest point in seven years, with these levels last seen in December 2012. Although prices have fallen 27.5% from the September 2014 peak, they remain higher than the previous market low of April 2009.

Meanwhile, even as property prices have declined, the volume of sales transactions has risen.

November 2019 marked one of the strongest months for sales in the past decade, with a total of 5,025 transactions were recorded with off-plan (Oqood) registrations.

Commenting on the findings, chief operating officer at Property Monitor, Zhann Jochinke, said: “The inverse relationship between property values and the volume of transactions is a natural economic occurrence, partly driven by increased real estate supply.”

Jochinke added: “However, whilst property values might be at multi-year lows, the higher transactions reflect buyers’ long-term confidence in the Dubai property sector. The increased availability of affordable properties for a larger segment of the audience is certainly a positive, but developers must readjust earlier expectations of potential returns.”

Property Monitor’s family of indices leverages historical datasets, proprietary algorithms, and machine learning to capture underlying trends in property values.  

As a unique feature, the DPI dynamically repopulates by incorporating any new datapoint or dataset that becomes available, overcoming any historical inaccuracies or misrepresentation of values and trends.  

The indices replace the previous generation of Property Monitor price movement and indexation products, which were compiled in collaboration with property consultancy and chartered surveying firm Cavendish Maxwell.

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