Dubai sees ‘unexpected’ slight uptick in property prices in April

The volume of transactions went down 47% in April compared to March.

Dubai property prices experienced an “unexpected” uptick in April, with prices increasing 0.49 percent from the previous month, according to new data from Property Monitor.

In its monthly market report, Property Monitor said prices in April stood at AED 866 per square foot in April, slightly above March’s AED 862 per square foot.

The volume of transactions, however, was significantly lower in April than in March, as mobility restrictions impacted financing and purchase decisions. April’s total of 1,825 transactions represented a 47 percent decrease from March.

Off-plan transactions accounted for 72.1 percent of the total transactions in April, compared to 27.9 for resale. Historically, the transaction split averaged 55 percent off-plan to 45 percent resale.

“Off plan properties command higher ticket prices than resale as developer incentives including attractive payment plans, discounts and fee waivers are often built into the sales price,” the report stated. “On a monthly basis, resale transactions were lower by 68.4 percent, whilst off plan sales were only down 13.4 percent for the same period.”

The increase, the report notes, is ‘likely artificial and temporary in nature’ as resale deals without physical viewing are a greater challenge than for off-plan.

“Now that the mobility restrictions have been eased and online modes of transfer for both off plan and resale properties have become available, a more normal market mix should result,” the report noted.

“The outlook for prices will be closely watched by brokers, developers, lenders and surveyors alike for any evidence of the renegotiation of existing deals and the inevitable activities of short term bargain hunters.

“Any of these short term price movements would not necessarily point to a sustained, more rapid or longer term softening of prices,” it added. “It is too soon to judge the longer term impacts of lockdown and the effectiveness of the mitigation measures being adopted around the globe.”

This article was originally published in Arabian Business.