Properties costs in Dubai are regaining their strength, whereas as the loans struck a record high in recent weeks, this gives the glimpse that the properties market is regaining its strength from the coronavirus slump, this was revealed in a new report.
According to the Property Monitor Dynamic Price Index, the prices for the apartments and villas all over the emirate has registered an average rise of about 1.5 percent in December while comparing it to November. While in the same month, the loan reception hit a record high of 2,192.
“Our predictions of having reached a market floor in Q3 2020 has proved accurate,” the real estate intelligence platform said in its report.
“After a marginal increase in prices during the month of November, property prices continued to display signs of recovery and a return to growth in December.”
Still Subdued
However, the property market still lags behind as compared to 2019, with the total transaction volumes for 2020 still lower by 13.5 percent in comparison with 2019.
As calculated for December 2020, the cost of residential units in Dubai stood at 833 UAE dirhams per square foot, which is down to 32.5 percent from the market peak in September 2014.
Property Monitor said that the rates are at present 6.1 percent away from the market trough of April 2009 and at levels last recorded in June 2009, when they were at 831 per square foot.
Still, Property Monitor maintained that the market is showing signs of fluctuation and also that this could be back on track to recover. The credit of this goes to the recent peace accord between the UAE and Israel, and also other positive developments that have triggered international visitor arrivals in the country.
“The recent peace agreement between the UAE and Israel seems certain to lead to a flood of new visitors from the latter – many of them will be actively looking for opportunities especially in the real estate sector,” Property Monitor said.
The Slower Pace of Decline
“In December, our bullish view is further supported by the data which shows a dramatic slowing in the pace of decline in 2020 compared to previous years,” the firm said.
This shows that a year-to-date decline to prices of 3.4 percent was recorded in the 12 months to December 2020, an enhancement as compared to the 12.9 percent fall for the same period in 2019.
Including, the month of December recorded 3,772 transactions, which rises by 25.5 percent compared to the same month in 2019.
“Overall, the sector has displayed resilience in the face of the pandemic, helped by government measures and with movement restrictions triggering people to upgrade their living spaces,” said the report. “We expect transaction volumes to maintain their upward momentum as long as quality and well-priced ready inventory is available to fulfill strong buyer demand.”
Analysts are split on whether the market is on the road to recovery. While Property Monitor claims that the real estate sector is bouncing back, other industry sources suggest that there will be further declines not just in sales prices but also rents this year.
Analysts are contradicting whether the market is on the track to recovery. While Property Monitor claims that the real estate sector is rising back, other industry sources provide that there will be further declines not only in sales prices but also the rents this year.