Dubai Apartments Demand and Selling Prices — Q1 2016
According to Dubai Government, Emirates Consumer Price Index went up by 4.07% in 2015. The overall Consumer Price Index (CPI) reached 127.05 in December 2015 and the GDP reached 4.6%. The GDP has been calculated using the methodology of production according to Dubai statistics. The decrease of oil prices has affected the government spending and their budgets.
The economic growth, liquidity, the stock market and asset prices have also been affected by the difference in oil prices. JLL report states that this change has also impacted the financing of real estate projects as there is an increased focus on critical infrastructure and affordable housing projects. It seems like the government has decreased their spending on less urgent projects, which causes delays or scaling back of many projects.
Dubai Apartments — Demand and Prices
It seems like many long term tenants are willing to switch to owner occupation. Due to the market needs, many developers are starting to adopt market changes such us lowering their prices and give better payment plans.
The extension of the Red Line Metro will bring more demand for the surrounded areas and therefore we will witness an increase of the price rate per square foot of those areas.
Many areas showed a high number of transactions, most likely linked to the deadline for homeowners to register their properties with Dubai Land Department.
After the decline of apartments sales transactions in Q3 2014, the market faced a soft increase in the first quarter of 2015, however since then it started to continually drop until the Q3 of the year. In the last quarter the transactions were slowly increasing again and also the average sales rate. The apartments segment prices in Dubai, declined by almost 6% in the Q3, indicating further price reductions during the summer season. In the last quarter it seems that the prices had started to slowly increase by a very small percentage. The average sale property price per square foot recorded at the end of Q4 2015 is similar to rates recorded in the Q4 2013.
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Apartment Sales Transactions