Dubai property prices rise in April boosted by off-plan sales

Prices in April stood at Dh866 per square foot, according to Cavendish Maxwell's property monitor

Dubai property prices in April rose 0.49 per cent from a month ago, according to a property report. Reem Mohammed / The National

Dubai property prices in April rose 0.49 per cent from a month ago, helped by a rise in off-plan transactions, a new report found.

Prices in April – the month during which the UAE enforced stay-at-home directives – stood at Dh866 per square foot on average, slightly higher than the Dh862 per square foot recorded in March, the Cavendish Maxwell’s Property Monitor report said.

“This increase is likely artificial and temporary in nature as closing resale deals in the absence of physical viewings is a greater challenge than for off-plan," the report said.

"Now that the mobility restrictions have been eased and online modes of transfer for both off-plan and resale properties have become available, a more normal market mix should result.” Off-plan property deals accounted for 72.1 per cent of total transactions in April compared to 27.9 per cent for resale.

However, the volume of closed transactions in April was significantly lower than the previous month due to mobility restrictions imposed by the government to contain the spread of the coronavirus pandemic. A total of 1,825 transactions were recorded during the month, down 47 per cent from March.

The report also said year-on-year property prices have fallen by 8.3 per cent, which is an improvement on the previous 12 months to April 2019 where a year-on-year decline of 9.7 per cent was recorded.

The bulk of off-plan market transactions were by Dubai Properties at 26.2 per cent, with a high volume of registrations at La Vie (Jumeirah Beach Residences), Madinat Jumeirah Living, and Villa Nova. This was followed by Emaar at 23.5 per cent, with the majority of their off-plan registrations at Marina Vista (Dubai Harbour), and various projects at Dubai Creek Harbour and the Opera District.

Dubai's real estate market has slowed in the wake of a drop in oil prices that began in 2014, and due to an oversupply in the property market. The coronavirus pandemic has further pressured the sector as live viewings dwindled.

However, with movement restrictions easing in the UAE, the sector is expected to rebound.

Dubai's property market is expected to bounce back strongly in 2021 on the back of increased economic activity related to Expo 2020, Damac chairman Hussain Sajwani said last month.