Reidin, the leading real estate information company focusing on emerging markets, has recently released a report about the state of the current Dubai real estate market.
According to the report, apartments city-wide are still down 13% versus their peak (back in 2014) but we are seeing signs of the correction coming to an end with a year to date increase of 1.3%. Some matured areas have been more affected than others with the likes of Downtown and Dubai Marina being respectively down 19% and 18% versus mid-2014 however they remain flat versus January 2016.
The downtrend seems to occur to flat rental prices also but at a slower pace with average prices city-wide being down 7%. However when looking at a community level, the report reveals that some areas such as JLT, Palm Jumeirah and Sports City have seen a slight rebound from their lows.
On top of analyzing prices, the report also had a look at the number of real estate transactions and activity for the last quarter remains 60% below its peak (end of 2013).This can be explained by the increasing amount of mortgages.
Historically, property finance has accounted for 25% of overall sales in Dubai. However in the last few years, this ratio has gone up to 50%. Whereas cash transactions are pretty much immediate (within 5 to 7 days), mortgaged transactions can take up to 45 days to be concluded which in turns will create a delay for the transactions to be registered.
When looking at areas, pretty much all the main areas transacting have seen a consequent increase since the start of the year. Should transactions continue to grow, so will prices.
This is a good sign that investors are coming back to the market and are gearing up prior to the Expo 2020. Also with all the exciting new projects launched by the developers and their attractive payment plans, there is no better time to invest than now.