International Finance
Real Estate

Value of Dubai’s residential properties drops by 2.6% in Q3

The annual drop in capital value is around 11.2%

The value of residential properties in Dubai has dropped by 2.6 percent during the third quarter of 2019. The annual drop in value was around 11.2 percent, according to a local consultancy firm ValuStrat.

The drop in the value of residential properties resulted in a 31.1 percent citywide capital value loss since mid-2014. All major locations in Dubai surveyed by the consultancy firm witnessed price drops in the bracket of 1.8 percent to 4.5 percent in the third quarter.

While properties in Palm Jumeirah and Emirates Hills, as well as apartments in Dubai Sports City, witnessed a single-digit drop in value, capital values dropped more than 15 percent annually for apartments in Discovery Gardens and Dubai Production City.

With regard to the drop in the value of residential properties in Dubai, Haider Tuaima, the head of Real Estate Research at ValuStrat told the media that, “Residential capital values per square feet approached 2012 levels prompting 40 percent annual rise in off-plan sales and 34 percent growth in ready home sales. Additionally, more than half of residential sales were for apartments priced less than Dh1 million and villas priced less than Dh2 million.”

Around 37 percent of the total supply of residential properties in Dubai for 2019, which is around 12,948 units, has been completed so far. The construction of another 16,000 residential apartment units and 6200 villas are expected to be completed by the end of the year.

Vice President and Prime Minister of the UAE, Sheikh Mohammed Bin Rashid Al Maktoum recently announced through a letter that real estate projects in Dubai need to be revamped to bring added value to the national economy and not lead to an imbalance in the Emirates’ economic process.

One of the major reasons for Dubai’s real estate sector’s woes over the past few years has been excess supply to the market.

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