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Mid-market homes in Dubai see price uplifts

dubai - Q3 sees increase in sales of apartments priced between Dh2 million and Dh3 million

Affordable locations lead the Dubai property market price recovery in Q3 2016, according to consulting firm ValuStrat.

Compared to the previous quarter, 10 locations saw appreciation in property values. International City witnessed the highest quarterly improvement of four per cent, while Motor City increased by 3.4 per cent, Dubai Production City (former IMPZ) saw an increase of three per cent and Downtown Dubai was up by 2.3 per cent.

Apart from Dubai Sports City that saw a quarterly price fall of 5.6 per cent, other declining locations saw dips of less than two per cent.

The Q3 2016 ValuStrat Price Index (VPI) displayed 0.6 per cent annual decline in values. The October VPI, however, saw no change in value for most locations it monitors. However, monthly uplifts of 0.7 per cent to 3.2 per cent were recorded for mid-market villas and apartments in Jumeirah Park, Jumeirah Village, Motor City, Discovery Gardens and International City.

Values in Motor City are now only 5.6 per cent lower than their 2014 peak.

Victory Heights villa prices were up by 0.8 per cent on a quarterly basis, which was the highest increase for freehold villas monitored by the VPI.


Transaction volumes
According to the consultancy, residential sales transaction volumes in Dubai witnessed an estimated quarterly decline of 25 per cent for apartments and 14 per cent for villas. This drop may be attributed to the traditionally quieter summer months.

ValuStrat estimates the total supply of residential apartments and villas to be completed in Dubai in 2016 at 15,000 units. An estimated 5,500 residential units were completed year to date.

The median residential transaction price increased by 6.6 per cent year on year (YoY). When compared to Q2, the median residential transacted price was up by 5.2 per cent. There was a noticeable quarterly increase in sales of apartments priced between Dh2 million and Dh3 million, the report said.

Meanwhile, residential asking rents in Dubai declined by eight per cent year on year. An exception was the average asking rents for studio apartments, which rose 6.9 per cent YoY and 1.6 per cent quarter on quarter.

Office prices in Dubai remained broadly flat since the beginning of 2016. Business Bay accounted for the lion's share of total office sales at 46 per cent, followed by Jumeirah Lakes Towers at 34 per cent.


Mall rents
Prime mall rents remained flat since the beginning of the year. High-end fashion retail stores reported single digit lower sales figures for some of the older brands but growing sales for newer concepts. Apart from lower spending by Russian, Chinese and UK tourists, Dubai's resident consumers faced reduced purchasing power due to rising inflation.

The total number of hotel rooms and hotel apartments as of August 2016 in Dubai crossed the 100,000 mark, with 100,211 units within 676 establishments.

One hotel had a soft opening in Q3 - the 1,004-room Westin Habtoor City, near Business Bay.

July's hotel occupancy rates increased by 17.6 per cent YoY mainly due to the Eid Al Fitr holiday as demand was up 24.6 per cent YoY.

The first eight months of 2016 saw annual visitor increases of 18 per cent from Oman, 18 per cent from Philippines, 14 per cent from Pakistan, 10 per cent from India and 13 per cent more visitors from China. There were less visitors from Jordan -20 per cent, Australia -12 per cent, Egypt -7 per cent and Iran -5 per cent. This could be owing to a strong US dollar and other economic headwinds.

- deepthi@khaleejtimes.com