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The real estate unit of valuation experts ValuStrat saw moderate growth for Dubai's property sector as transaction data from Dubai's Land Department (DLD) showed that apartment prices per sq ft rose by 27.2 per cent to Dh1,390 last month, compared to the same period last year.
ValuStrat's real estate report, which was released ahead of Cityscape Global, also showed a significant rise in the prices of studio units (700 sq ft or less), by as much as 36.2 per cent to Dh1,112 on a year-on-year basis.
Declan King, Director and Group Head of Real Estate at ValuStrat, said that an analysis of these statistics suggests ''Dubai's appetite for apartments was particularly heightened during the property market recovery phase, likely due to apartments offering lower ticket entry prices and attractive rental yields''.
''In a rising market, the highest percentage gains are often seen by lower-priced variants such as studios, as both investors and owner- occupiers target smaller and more affordable properties.''
During the period under analysis, upward pressure on rents was especially strong in smaller studio properties, which contributed to increased focus from investors.
Meanwhile, the volume of registered apartment transactions proved reasonably resilient during the period, dropping by 4.8 per cent year-on-year. ValuStrat observed that these statistics are yet to include the high volume of off-plan apartment sales since the market recovered in late 2012. ''Most of these apartments will only be counted in official figures after handovers in the next few years,'' said King.
However, the decline in transaction numbers suggests that measures to cool the market, such as increased transaction fees and revised mortgage criteria, are having their desired effect, particularly on Dubai's secondary property market. In the report, ValuStrat anticipated that the rates will moderate over the rest of the year. ''It will be interesting to see how purchaser demand holds up in the fourth quarter and what happens with off-plan new home launches in the medium price range,'' said King.
Read on Dubai's Real Estate which makes a compelling case for investors
Source: Property Weekly