Residential property prices in some communities in Dubai have begun to show positive month-on-month change for the first time in 12 months, new research reveals.
Areas including Al Furjan, Discovery Gardens and Dubai Silicon Oasis showed modest increases of between 0.0 percent and 0.12 percent for the month of January, according to agency Cavendish Maxwell’s latest Property Monitor Index (PMI), which tracks residential sales and rents across Dubai and Abu Dhabi.
“In January we began seeing a change in our monthly PMI, with some areas showing a growth month-on-month,” said Lynnette Abad, partner at Property Monitor.
She added: “Since the index tracks live transactional data from agents, valuations and our in-house database, these changes are a reflection of the direction of the market.
“We will be watching the numbers closely in the coming months for early signs of a market-wide turnaround.”
Property Monitor is the UAE’s only data platform offered by a Royal Institute of Chartered Surveyors (RICS)- approved real estate agency.
Meanwhile, the latest Cavendish Maxwell Residential Market Survey, conducted quarterly among agents in Dubai, revealed that the majority of agents predicted new buyer enquiries, seller instructions and agreed sales to increase in the first quarter of 2017.
This compared to their previous predictions of prices and rents remaining largely unchanged in the fourth quarter of 2016, which was reflected in the quarter end results.
As of December, prices in Dubai declined by over 15 percent on average since highs seen in the second quarter of 2014. Factors behind the decline included job redundancies, limited liquidity in the market due to rising costs such as transport, and schooling, and ongoing new supply over the last 12-18 months, the report said.
In some areas, this continued supply is expected to put sustained pressure on prices even if others areas appear to be recovering.
Manika Dhama, senior consultant at Cavendish Maxwell, said: “In the first half of this year, significant supply is expected in areas such as Dubailand, Business Bay and Sports City and this will continue to put pressure on prices in the coming months.
“Nearly 76 percent of the total scheduled supply in 2017 is apartments. While price declines have promoted increasing interest from first time buyers, the deposit requirements and equity contribution on the overall purchase are still prohibitive for most.
“Improved activity from owner-occupiers is a sign of a maturing market and growth in activity from this segment in Dubai residential property will be based on factors such as expat job growth and lending parameters that especially cater to them.”
Cavendish Maxwell’s survey also found that property developments geared towards environmental sustainability are rising in popularity.
Zarah Evans, managing partner of Exclusive Links Real Estate in Dubai, said: “As the consumer is becoming more environmentally responsible, projects and communities geared towards sustainability are becoming more popular and are in line with Dubai’s focus on creating a more green economy.
“We will see a rise in prices during 2017 and particularly more as we creep toward 2020 [when Expo Dubai is being staged].
“Work-live-play environments will be more attractive, especially in the more affordable areas such as Al Furjan, Discovery Garden and Silicon Oasis.”
Another real estate report this week, by consultancy ValuStrat, found that property prices in two residential areas of Dubai are now less than 5 percent below their peak in 2014 as values edged upwards.
In particular, values in Motor City are being recorded at only 3.2 percent below peak, followed by Dubai Production City at 4.5 percent below peak.