Monday 18 November 2019
 
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Dubai freehold units' Q3 capital values down 4.5pc

DUBAI, October 16, 2019

The capital values in the majority of the established freehold locations in Dubai have witnessed price drops since the last quarter, ranging from 1.8 per cent to 4.5 per cent, said a leading local consulting firm ValuStrat in its Dubai real estate review for third quarter 2019.

Tracking change in capital values for a representative fixed basket of properties, the ValuStrat Price Index (VPI), displayed an overall 11.2% annual fall in capital values, with quarterly declines decelerating to 2.6%.

So far, citywide capital values have declined an average 31.1% since the peaks of mid-2014. All established freehold locations monitored by the VPI witnessed price drops since the last quarter, ranging from 1.8% to 4.5%.

ValuStrat pointed out that on an annual basis, three out of 26 locations were more resilient to downward pressure and saw single-digit declines in villas at Palm Jumeirah and Emirates Hills, as well as apartments in Dubai Sports City.

Capital values dropped more than 15% annually for apartments in Discovery Gardens, and Dubai
Production City, stated the rental VPI.

The 100 index with a base set for Q1 2014, the Dubai VPI monitors 16 apartments and 10 villa locations within the emirate’s freehold market and compares similar units within those
locations on a quarterly basis.

According to the report, the overall residential asking rents fell 7.9% year-on-year (YoY), while it was down 1.7% on a quarterly basis. Compared to the same period last year, listed rents were down 7.7% for apartments and  8.3% for villas.

The average annual rents for two-bed villas stood at Dh105,000, three-beds at Dh160,000, and
four-bedroom villas remained at Dh209,000.

The studio apartments' annual rents were seen at Dh48,000, while the rents for one-bed was Dh67,000, two- for Dh97,000, and three-bedroom apartments were Dh130,000.

The Q3 2019 residential rental VPI in Dubai stood at 72.6 points, declining 27.4% since 2014, softening 1.7% quarterly and 7.9% annually. Dubai’s net yields averaged 5.9%, with apartments at 6% and villas at 4.8%.

On the Dubai office sector, ValuStrat said the capital values have fallen 2.5 per cent since the last quarter to 67.6 VPI points.
 
This translates to capital values being 32.4% lower than the same period during the index base year 2015, and 16.3% lower than the same period last year, it added.

The office space in Jumeirah Lake Towers witnessed the highest annual drop of 19.3% and 3.8% QoQ, followed by Business Bay with declines of 14.7% annually and 1.3% quarterly, stated the report.

Dubai International Financial Centre (DIFC) demonstrated relative resilience to the overall
citywide downward trend, as capital values softened annually by 5.3%, it added.-TradeArabia News Service




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