Dubai property plateau suggests end to down cycle

Dubai residential property prices may have bottomed out after plateauing in May 2016, according to consultancy firm ValuStrat.

The company said prices stabilised in April and May after almost two years of declines, citing its price index, which stood at 98.0 points last month from 100 points in January 2014.

Prices, when compared to the last eight months, showed no significant change in value but were down 1 per cent over the same period last year, it said.

In the company’s index, the villa market stood at 96.7 points in May, unchanged from April and down just 0.2 per cent since January, while the apartment market registered 98.8 points, unchanged from April but up 0.3 per cent since January.

For the last two years, property sale prices and rents have been on the decline, slowing down real estate transactions. Analysts have attributed this trend to falling oil prices and the strengthening of the US dollar, leading to reluctance to invest in luxury properties.

Read: Continued decline ‘likely’ for UAE real estate prices

However, the last few months have seen positive signs of recovery and increasing investor interest.

ValuStrat suggested that the “minor price uplifts” and notable increase in Dubai Land Department transaction volumes in several locations during May added to possible signs of bottoming-out in monthly value “across most of the 26 areas it monitors for apartments and villas”.

Online portal propertyfinder.ae also recently noted property buyer interest in the United Arab Emirates had increased to its highest level since 2014.

The company said last month that although real estate prices across the country had fallen 20 to 40 per cent over the last 18-24 months, qualified buyers were now watching carefully to find the bottom of the market.

Read: Has the UAE property market bottomed out?

Amid sings of demand picking up again, several off-plan residential projects have been launched in Dubai so far this year and are predicted to add more then 2,000 units to the pipeline by 2021.

These include Dubai Properties’ Bellevue Towers and Bella Casa – Serene, Damac’s Aykon City and Emaar’s Harbour Views.

Read: Dubai Properties says first phase launch of Bellevue Towers sold out