Dubai property market showing signs of recovery

With a clear 12 month trend of relatively stable sales prices, the general sentiment has been cautiously optimistic towards a recovery commencing in the second half of this year, according to consulting firm ValuStrat.

“Evidence from the market place also indicates that both investors and end-users are now doing deals on well-located and correctly priced properties,” the consultancy said in its second quarter 2016 real estate review.

“For the second quarter of 2016, Dubai Land Department transaction volumes for the ValuStrat price index (VPI) coverage areas witnessed quarterly increases of 14 per cent for apartments and 7 per cent for villas,” said Haider Tuaima, ValuStrat Research Manager.

The VPI is a comprehensive data driven representation of the monthly price change experienced by typical freehold properties.

The second quarter index displayed an overall 1.1 per cent annual decline in values. However, the monthly growth rate of residential values has been broadly stable since July 2015.

April and May’s residential VPI registered 98.0 index points while June dipped slightly by 0.1 per cent to 97.9 index points. Statistical analysis has shown further indications of an early recovery in some areas, signalling possible signs of a bottoming-out in property values across the VPI coverage locations during the course of the year.

Residential investment yields saw some gain as the median asking rents this quarter were 1.3 per cent higher than the fourth quarter 2015 and 2.8 per cent higher than first quarter 2016.