Real estate trends: Dubai's home sales fall; decline in property prices slows down

Pace of decline in capital values slows down

  
Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road, Dubai, UAE.

Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road, Dubai, UAE.

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The decline in Dubai’s residential values showed signs of decelerating in October, but sales of home units have somewhat slowed down, a new report has revealed.

The average capital values for the emirate’s apartments and villas dipped just 0.7 percent during the month compared to September, and 14.4 percent compared to a year ago, according to consulting firm ValuStrat.

The rate of monthly decline is the lowest in 16 months.

However, sales of residential units in October were lacklustre when compared to previous months, registering a 33.7 percent decline in the off-plan segment and 6.8 percent decline in ready homes, when compared with September.

Sales of residential properties around the emirate had picked up earlier, particularly after the lockdown was lifted and restrictions eased, with most of the buyers snapping up ready homes. A lot of the potential homeowners were interested in properties with outdoor private space like balcony or garden.

Asteco’s latest analysis showed that there was a lot of buyer interest during the third quarter of the year. “Pent-up buyer demand from the lifting of movement restrictions has resulted in higher than anticipated transaction volumes in the third quarter of the year,” Asteco said.

However, while Q3 witnessed a V-shape trend in sales transactions, ValuStrat said, the first month of Q4 registered a decline when compared to the previous month.

Least affected developments

On a positive note, given the high demand in the previous months due to record low prices, larger villa capital values demonstrated in October higher resilience as compared to apartments.

The least capital value declines in October were found in Arabian Ranches, The Meadows, Emirates Hills and Palm Jumeirah.

Also, during the month, 61 percent of cash-based sales transaction volumes were towards ready homes as off-plan sales have slowed due to limited project launches.

Among the properties in the market, those developed by Emaar, Nakheel, Sobha, Dubai Sports City and Damac, were the most sought-after by buyers.

The top off-plan locations transacted during October were in Sobha Hartland, Dubai Creek Harbour and Jumeirah Village.

The most transacted ready homes were Dubai Marina, Jumeirah Village, Business Bay and International City.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

Cleofe.maceda@refinitiv.com 

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