How Dubai property prices, rents will perform in 2020
A new report by ValuStrat has indicated that capital values and rents in Dubai would continue to soften in 2020 but at a slower rate. According to the report, the city will see increasingly affordable rents in 2020, particularly for townhouses and small villas.
It added that rentals and capital values for prime office space located in Dubai International Financial Centre (DIFC) and Downtown Dubai would likely remain stable in 2020, bucking the trend of lower rents at secondary locations in the city.
The forecast was part of ValuStrat’s latest research, which showed that property prices in Dubai were down 10.7 percent on average on an annual basis in the fourth quarter of 2019. Its ValuStrat Price Index (VPI) for residential properties displayed an average monthly decline of 0.8 per cent compared to November. ValuStrat said this downward trend resulted in a 33.3 percent citywide capital value loss since the peaks of mid-2014.
The residential rental VPI in Dubai stood at 70.8 points, declining 29.2 per cent since 2014, down 3.8 per cent quarterly and 9.1 percent annually. The report noted that Dubai’s net yields averaged 5.9 percent, with apartments at 6.1 percent and villas at 4.9 percent.
It added that, excluding December sales, there were 5,473 off-plan transactions in Q4 with 2,674 ready home cash sales worth a total of AED12.9 billion, up 2.9 percent on a quarterly basis.
Overall cash sales volumes for 2019, both off-plan and ready homes, were already more than 25 per cent higher than the previous year, ValuStrat said. “A more positive market sentiment is expected due to direct and indirect drivers impacting tourism, business and the overall economy as Expo 2020 kicks off during the fourth quarter, while 300,000 jobs are likely to be created due to Expo 2020.” The report added.