Dubai property prices 22% lower than 2014 peak: report

Dubai’s residential property prices are 22.3 percent cheaper than the peak of mid-2014, consulting firm ValuStrat said in a recent report.

While capital values fell by nine percent in Q3, the decline moderated to 2.9 percent since the previous quarter, with established freehold locations reporting price declines of 0.2 percent to five per cent, it added.

Among the established communities Jumeirah Islands, Business Bay, Palm Jumeirah (apartments) and Discovery Gardens saw price declines of over four percent. However, capital values for villas in Palm Jumeirah and Al Furjan remained flat compared to the previous quarter.

Meanwhile, established areas that saw substantial off-plan sale transactions in Q3 included Downtown Dubai, Business Bay and Remraam. Average ticket prices for off-plan homes slipped 3.8 percent quarter-on-quarter (QoQ), whereas ready property ticket sizes jumped 9.5 percent QoQ, suggesting improved interest in prime properties.

According to the report, an estimated 12,332 apartments and villas, 27 percent of the total supply as expected at the start of 2018, have been completed year to date. Seventy percent of these completions, amounting to 8,614 units, were located mainly in five areas: Dubailand, Jumeirah Village Circle, Dubai Silicon Oasis, International City phase 2/3 and Dubai Marina.

"Our research has shown that this quarter saw increased investor focus on ready-to-move-in apartments and villas priced between AED 3 million and AED 5 million, causing the average ticket size to jump," said Haider Tuaima, head of real estate research at ValuStrat.

Residential asking rents fell 11 percent year on year. On a quarterly basis, asking rents declined 5.1 per cent, the report said. Listed rents were down 11.1 percent for apartments and 10.2 percent for villas compared to the same period last year.

"While the third quarter is normally a quieter time in the Dubai real estate sector, with many people away during the summer holiday months, it will be interesting to see if early signs of a slow-down in price declines continue into Q4," Declan King, managing director and group head real estate, ValuStrat, added.