Property prices in some parts of Dubai reached new decade-long lows in September, according to new research published on Wednesday.
The annual average price per sq ft fell to AED896 for 2020, AED2 lower than the previous low seen in 2010 following the global economic crisis.
The figures were published by real estate consultants ValuStrat in its monthly report on the Dubai property market.
Its VPI – Residential Capital Values for Dubai index stood at 66 points, declining 1.5 percent monthly.
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This rate of decline continued to decelerate from 1.9% during the April-June movement restrictions.
Annually, residential capital values declined 14.5 percent, ValuStrat said, adding: “There is no doubt that residential capital values in many locations are very close to, or have already reached, record lows for the last decade.”
The research showed that the third quarter of 2020 saw ready home sale volumes surge 159.7 percent when compared to the previous quarter and grow 14.5 percent annually as buyers sought to take advantage of the low prices.
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ValuStrat added: “While there is an obvious V-shape trend in terms of sales, citywide capital values are yet to stabilise, as the downward trend continues, albeit, at a slower pace.”
It added that all properties monitored by the VPI saw capital values decline by as much as 2 percent monthly for apartments in Jumeirah Village Circle and Discovery Gardens.
The least registered capital value declines were found in Arabian Ranches, Jumeirah Lake Towers, and International City.
Cash sales of residential properties were split 53 percent for ready homes versus 47 percent for off-plan purchases. Compared to August, September’s ready home transactions jumped 113.8 percent, forming a V-shaped recovery trend, positioning the third quarter of 2020 as the best quarter in terms of ready home transactions sales volume since 2012.
However, due to reduced project launches by developers, third quarter off-plan home sales dropped 5.2 percent quarterly and 47.6 percent annually.
Last week, research from UBS said Dubai’s real estate market remains fairly priced compared to other major cities in the world after seeing six years of falling values after reaching a peak in 2014.
The UBS Global Real Estate Bubble Index 2020, a yearly study by UBS Global Wealth Management’s Chief Investment Office, indicates bubble risk or a significant overvaluation of housing markets in half of all evaluated cities around the world.
The Eurozone stood out as the region with the most overheated housing markets. Munich and Frankfurt topped the ranking, with Paris and Amsterdam closely following.
By comparison, prices in Dubai are fairly valued, UBS said, adding that the market is likely to see a rebound in the mid- to longer-term.