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With a steady decline in prices, stagnant investor interest, delayed supply, stable rents and decreasing sale volumes, statistical analysis suggests prices could plateau next year, according to consulting firm ValuStrat.
The Residential ValuStrat Price Index (VPI), a 100-point index that started tracking residential values in 26 key locations in Dubai from January last year, has shown a 10.3 per cent annual decline and 0.9 per cent quarterly dip in values. July’s VPI registered 98.4 points, while August and September registered 98.2 and 98.1 points respectively.
ValuStrat reported a 14.7 per cent annual decline in residential transacted prices, although it noted that investor interest has increased for bargains and distressed sales with a sentiment of improved market activity in the coming months.
“When compared to the second quarter, transacted residential prices dropped by 5.6 per cent,” the firm said. “The median transacted apartment price stands at Dh 10,850 per square metre. The median transacted villa price stands at Dh 11,496 per square metre.”
According to ValuStrat, average apartment asking rents dipped by 4 per cent compared with the same period last year, while villa rents were down by 6 per cent. On a quarterly basis, apartment asking rents declined by 1 per cent, with villa asking rents falling 4 per cent. Overall residential rents were 1.6 per cent higher than the same period in 2013.
Meanwhile, office transaction prices decreased by 4.6 per cent since last year and 5.2 per cent since the second quarter. The median asking rent in Dubai is Dh1,141 per square meter. DIFC lists the highest asking rents of up to Dh3,218 per square metre.
Source: Property Weekly