Dubai’s house price index rises 0.54% in May as coronavirus-related restrictions ease

The emirate registered a total of 1,440 sales transactions worth Dh2.47bn in May

Dubai's Rent Dispute Centre said it was sympathetic to tenants who could not pay due to job losses or salary reductions. Reem Mohammed / The National

Dubai’s official monthly house price index rose 0.54 per cent in May, indicating pent-up demand as the government eased coronavirus-related restrictions on movement.

The house price index value increased to 1.121 points in May compared with 1.115 in the previous month, according to the latest data by the Dubai Land Department.

For apartments, the index reached 1.189, which is the highest since April 2019, and for villas and townhouses it was 1.060 - the highest level since November 2019, the data shows.

Dubai also recorded a total of 1,440 sales transactions worth Dh2.47 billion in May, 66.5 per cent of which were in the off-plan and 33.5 per cent were existing homes.

“Real estate transactions immediately picked up after the National Sterilisation Programme eased in Dubai. In May, we saw pent-up demand similar to what we see following seasonal holidays as sales and rental enquiries were significantly above the same week last year across all unit types,” DLD said in a statement on Sunday.

Overall, the emirate saw 13,590 sales transactions in the first five months of 2020 with a total value of Dh27.8bn, according to DLD.

The index, named Moasher, was introduced in December by Dubai Land Department in partnership with real estate listings portal Property Finder. The index aims to provide consumers with updated property sales price insights in the emirate on a monthly basis.

The overall Dubai house price index number for January 2020 was 1.112. It fell to 1.104 in February 2020 and declined further in March 2020 to 1.100. However, it started increasing again in April 2020 when it hit 1.115 and in May it strengthened again.

“Currently, the Dubai residential real estate market is going through a v-shaped recovery and when analysing the various indexes for May 2020, we are seeing the same v-shaped pattern in the recovery," Lynnette Abad, director, research and data at Property Finder, said.

The report also said sellers are “optimistic that things will gradually return to normal, so that they can receive and negotiate with their customers to enhance sales potential".

“There are increased opportunities for buying in the market due to the relaxed mortgage cap and the best mortgage products and interest rates we have seen in 15 years,” DLD said.

Dubai-based property developer Azizi, which has 54 residential projects across the emirate in its pipeline, also expects Dubai's property market to quickly rebound on the back of the UAE's stimulus programme as well as Expo 2020.

"We are seeing that the number of enquiries coming in has increased and we are hopeful that they will increase more when it comes to September and October when schools open," Farhad Azizi, the company's chief executive, told The National.