Dubai property prices rose slightly by 0.49 percent month-on-month in April, with off-plan registrations largely exceeding resale, according to a recent report.
In its monthly market report, real estate data and insights platform Property Monitor said that prices in April stood at 866 dirhams ($235.77) per sq. ft, marginally higher than the 862 dirhams per sq. ft recorded in March. The platform was launched in 2014 by consultancy and chartered surveying firm Cavendish Maxwell.
The reversal in the downward trend can be attributed to the disproportionate level of off-plan transactions recorded, the report said. This accounted for 72.1 percent of transactions in April, compared to 27.9 percent for resale.
“Off plan properties command higher ticket prices than resale as developer incentives including attractive payment plans, discounts and fee waivers are often built into the sales price,” the report said.
Historically, this transaction split has averaged 55 percent off plan to 45 percent resale.
“This increase is likely artificial and temporary in nature as closing resale deals in the absence of physical viewings is a greater challenge than for off plan,” Property Monitor said.
“Now that the mobility restrictions have been eased and online modes of transfer for both off plan and resale properties have become available, a more normal market mix should result,” it added.
The volume of closed transactions in April was significantly lower than in March as mobility restrictions impacted financing and purchase decisions according to Property Monitor. There were 1,825 transactions recorded during the month representing a 47.1 percent month-on-month decrease and a 36.2 percent year-on-year decline.
On a monthly basis, resale transactions were lower by 68.4 percent, whilst off plan sales were only down 13.4 percent.
Year-on-year property prices have fallen by 8.3 percent according to the report. This is an improvement on the previous 12 months to April 2019 where a year-on-year decline of 9.7 percent was recorded.
(Writing by Gerard Aoun; Editing by Seban Scaria)
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