Changing market/supply dynamic leads to slowing-down of the rapid price increases characterising the last 12 months
Apartment prices in Dubai have hit a plateau after months of strong growth, according to a new report by ValuStrat.
The latest ValuStrat Price Index (VPI), which tracks the market performance of residential properties across the emirate, saw a moderate 0.9% monthly increase in October 2022, indicating a slow pace of price growth.
Apartments registered only a 0.6% monthly change, with prices now averaging $244 per sqft, while villa prices went up by 1.2%.
In October 2022, MCRE said it had achieved record Q3 results of over $136mn in sales in Abu Dhabi’s property market.
According to ValuStrat, apartments in several areas in Dubai, including International City, Business Bay, Jumeirah Village, Discovery Gardens, Dubai Sports City, Remraam and Dubai Production City, showed no monthly change in capital values.
Capital gains of apartments in most areas in Dubai have not seen any improvement since last year and have been stable on a monthly basis, according to Haider Tuaima, Director and Head of Real Estate Research at ValuStrat.
He commented, “This is mainly due to a fundamental market demand/supply dynamic. When we look at upcoming supply, Dubai Land and Jumeirah Village alone contribute 21% of overall new supply of mainly apartment buildings in the coming two to three years. That, in our opinion, is the main reason why we are not seeing capital growth in those areas, particularly within the E311 and E611 corridors.”
In early November 2022, Amira Sajwani launched PRYPTO to deliver a holistic real estate experience.
Property prices in Dubai have recently been rising on the back of strong demand from investors from the region and abroad, according to the report.
Yet, as of Q3 2022, average apartment sales prices rose by 3% compared to the previous quarter, and 17% compared to a year earlier, according to Asteco. Villa prices also registered a 3% quarterly and 19% annual increase.
Later in November 2022, CRC said that Dubai’s commercial market reached an all time high in Q3.