Dubai Property Prices Maintain Investor Interest

Property prices in Dubai helped underpin transaction levels during the typically quiet month of August, with demand strongest in the affordable section of the market, according to a new report. Property prices in Dubai were 1.4 per cent less in August, reaching Dh807 per square foot, an 11-year low. Rents also came down at comparable rates, meaning gross rental yields remain "relatively stable" at 6.49 per cent, according to consultancy Cavendish Maxwell. Prices in Dubai have been gradually declining since September 2014, due in part to an oversupply of units but also to a pivot to building more affordable units. Sales of homes priced under Dh500,000 comprised 23.9 per cent of the market in August – up more than 2 per cent from July. Sales of homes below Dh1m made up 52.8 per cent of last month's transactions. Although August is usually a quiet month for deals, pent-up demand from earlier in the year when buyers were unable to complete purchases and continued low interest rates meant activity remained robust. There were 2,462 transactions during the month, which was 1.3 per cent lower than in July. By comparison, sales volumes in August 2019 were 48.5 per cent lower than the previous month, and in August 2018 they were 39.9 per cent lower. A shift in the market is also emerging with more completed homes being sold than off-plan, which have been the most popular segment over the past five years.