The price of apartment in Dubai fell by 2.25% in July compared with June, according to the latest real estate index and villa prices were down 1.19%.
The Reidin.com all-residential sales price index saw a drop of 0.85% in the same period following a 0.35% fall in June and a 1.23% fall in May, indicating that the price falls could be slowing.
In quarterly terms, the apartment price index dropped by 5.23% in the second quarter in comparison to the same period last year. But the villa index rose by 6.99% in the same period.
Prices of the smallest apartments fell the furthers, with those of 50 square metre or less dropping by 10.98% in July compared to the same period last year. Apartments and villas in the 101 to 150 square metre category held their price best, only dropping by 0.99% per year.
Reidin.com’s index is compiled in partnership with Dubai’s Real Estate Regulatory Authority (RERA) and is regarded as one of the best benchmark of what is happening with prices in the emirate as the firm gathers data from a number of sources including transactions for certain districts and communities in Dubai.
So it is a blow that it is still showing that prices are falling and Dubai is not the only market in the Gulf region where a recovery is yet to begin. The latest report from the National Bank of Kuwait shows that July saw the largest decline in sales for five months.
Sales fell 42% with only 415 property transactions registered at the Ministry of Justice during the month. It is a worrying trend after more stable sales figures.
‘The dip was driven by an unusually large seasonal effect, with activity falling away as the summer travel season began. The timing of the travel season might have shifted this year, with Kuwaitis holidaying earlier than usual in order to return before Ramadan,’ the report says.
It predicts sales should bounce back but analysts detect a worrying trend. ‘Sales activity should eventually bounce back, once the traditionally slow Ramadan period is over,’ the report says.
But some are concerned that there could be a drop ion confidence with fewer apartments and villas being sold, although sales are still better than a year ago.
Sales in the commercial and investment real estate sectors were also down, the report shows.
Investment sales fell 53% and there were five commercial sales. ‘In general, consumer confidence remains solid and lending conditions are more or less unchanged, suggesting little justification for a relapse in home sales,’ it added.
