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The real estate market of the emirate is making a slow but steady recovery.
A year after bottoming out, the Dubai property market continues to recover as prices increased by just under 1 percent in October to stand at USD 266 per square foot.
After a massive 2.51 percent gain in June, monthly price growth continues to gradually lose momentum and for the first time in eleven months becomes more sustainable.
Though the monthly pace of growth is slowing down, the annual figures have continued to rise, after the market hit a low point in November 2020.
Property prices went up by 19.9 percent year-on-year. And with the current price recovery continuing to mirror that of the previous cycle, where prices increased by 19.7 percent year-on-year during the October 2012-September 2013 period, further growth is expected in the months ahead.
The recovery has been powered by the strong performance of the villa and townhouse segments, especially in traditionally sought-after locations.
However, as inventory has dried up amid the seemingly insatiable appetite for this segment, a widening buyer-seller expectation gap has emerged. This leads to overpriced properties staying on the market as buyers look for value and explore other options, rather than indulge sellers' inflated demands.
Experts believe, that in such situation the focus will shift to apartment segment where sales volumes have been more subdued, price growth slower but affordability more attractive for investors and new overseas buyers.
This trend is likely to be supported by the impact of Expo 2020, bringing new buyers into the market attracted by the pricing and simplicity of apartment ownership.
Transactions in October totalled 5,224, dropping further by 7.9 percent on a monthly basis after a 2.2 percent decline in September. However, October still demonstrated the strongest performance since 2015. Despite these encouraging numbers, it is unusual to see a slowdown in transactions in October or other autumn months. This, coupled with the slowing pace of price appreciation are early indicators of the market cooling off to a more sustainable pace.
Year-to-date transaction volumes now stand at 48,629, surpassing total number of deals for 2020 by more than 35 percent, and up by over 16.5 percent compared to 2019.
Even with slowdown in sales and two months of the year remaining, total sales transactions can reach 58,000 by the end of 2021 and record numbers that were last seen during the boom years of 2013 and 2014.
In off-plan segment a total of 2,078 sales transactions were registered in October, down 17.8% percent month-on-month but 63.9% higher than a year ago.
Off-plan transactions made up 39.8 percent of all deals, while completed properties accounted to the remaining 60.2 percent, stopping the trend seen since January of the gap narrowing between the two.
This is likely to be brief and the trend expected to resume as soon as the existing unsold inventory is absorbed and developers start launching new projects.
