Dubai property prices dropped in October due to fewer transactions – after a “surprise” uptick in the previous month – a new report found.
Prices slid 1 per cent to Dh815 per square foot on average, just below levels last recorded in May 2009, the Cavendish Maxwell’s Property Monitor report said.
"September witnessed heavy transaction activity as the lifting of restrictions imposed during the early months of the Covid-19 pandemic allowed some pent-up demand to be fulfilled," the report said. "However, October's slower market activity displays signs of demand exhaustion and will likely set a similar trend for the coming months."
In October, total transaction volumes stood at 3,483, recording a yearly decline of 27.3 per cent and a 9.7 per cent decrease on a monthly basis.
Sales of ready homes continued to display relative resilience, the report said, with title deed transactions accounting for 62.8 per cent of sales in October. This is part of a longer-term trend, with the share of off-plan properties declining for five months in a row.
Resale transactions, completed properties that are not part of initial developer sales, reached 48.8 per cent of the total market in October, the highest level in over three years and well above the 12-month average of 30.1 per cent.
“These trends witnessed throughout the second half of the year suggest a maturing market characterised by demand being driven by well-informed buyers rather than by developers and more speculative investors,” the report said.
Mortgage transactions in October were down 6.7 per cent month-on-month to reach 1,618 due to “a decline in the volume of loans taken out for land purchases versus September”. However, loans granted to finance villa purchases grew 9.8 per cent month-on-month and 76.8 per cent year-on-year, displaying the strong demand for larger homes with more space.
“The recently announced initiatives by the government, including the provision of retirement visas and changes to personal laws, have the potential to underpin the market in 2021 and underlines the likely medium-term resilience of the market as a safe haven for international buyers.”
The top master developments for resale transactions, which are subsequent sales of a property once purchased from the developer, were Dubai Marina with 7.5 per cent of all resale transactions across multiple projects, followed by Emirates Living at 6 per cent.