After a nine-month relatively stable residential market, there were minute indications of an early recovery in some areas of Dubai, UAE, in the first quarter of this year, a report has said.

The ValuStrat Price Index (VPI) signals possible signs of a bottoming out in property values across the coverage locations during the course of the year, said the first quarter 2016 real estate review issued by leading local consulting firm ValuStrat.

The VPI features monthly analysis of multiple properties across 16 apartment and 10 villa locations in Dubai.

By applying statistically determined weights to different locations and specifications, it provides a real-time monitor of the city’s property cycle. The first quarter 2016 VPI displayed a 3.5 per cent annual decline in values. However, the general monthly rate of decline has shown no change in residential values. January’s residential VPI registered 97.9 index points while February and March slightly improved for the first time in almost two years, by 0.1 per cent to 98.0 index points.

After a nine-month relatively stable VPI, research by the consultants reveals that more end-users are seeking to get on the property ladder, anticipating long-term capital appreciation while saving on monthly rental expenditure.

Dubai’s apartment market has shown a slight quarterly improvement in values, up 0.1 per cent while the villa market saw values marginally decline by 0.2 per cent. The median apartment value in March was Dh14,198 ($3,865) per sq m and for villas it was Dh14,650 ($3,988) per sq m.

In terms of registered residential transactions, median residential prices were 10.4 per cent lower year-on-year (YoY) and 2.5 per cent lower quarter-on-quarter (QoQ). However, some areas witnessed increased transaction volume during this quarter.

“High-end villas priced more than Dh10 million saw about double the number of transactions as compared to the previous quarter. Also, their share of overall villa registrations increased from 5.7 per cent in the last quarter to 11.1 per cent now," added Haider Tuaima, ValuStrat research manager.

ValuStrat estimates total supply of residential apartments and villas this year would be 33,662 units. However, as in recent years this volume may be subject to significant downward adjustment as the year advances and project delays are experienced. Much of the 2016 supply comes from completions carried over from last year. Eight off-plan residential projects were launched in Q1, to add more than 2,000 units to the residential pipeline by 2021.

Office transaction prices fell by nine per cent since last year and 3.1 per cent since the last quarter. Median asking rents for office space remained relatively stable during Q1, with only a marginal change recorded in the last 12 months. The median asking rent for office space was Dh1,184 ($322) per sq m.

The total number of hotel rooms and hotel apartments at the beginning of 2016 stood at 98,333. Five hotels with 1,581 hospitality units were added in Q1. They included one five-star, while the rest were three and four-star.

Fifteen new hotels were announced to add 4,086 keys to the pipeline over the next three years. The average occupancy during January and February was 85 per cent, down 2 per cent when compared to last year. With increasing new hotel room supply, YoY Average Daily Rate (ADR) for the same period dropped by 11.7 per cent and hotel revenue per available room (RevPAR) fell 13.3 per cent YoY, the report said. - TradeArabia News Service