Residential property prices in Dubai rose 0.7% in the final quarter of 2009, compared to the previous quarter, according to new real estate index for the emirate that is billed as a new benchmark for the industry.
The figures from the new Sales Price Index for Dubai (SPID), which has been launched by REIDIN.com in partnership with the Real Estate Regulatory Agency and Dubai Land Department, is aimed at providing the market with a series of indices and data sets that can help improve transparency across the market and help real estate professionals benchmark and analyse residential price trends.
According to the latest information, the price of villas rose by 2.6% during the fourth quarter but overall prices are down 19.7% in 2009 compared to the fourth quarter of 2008.
Some of the 10 main districts covered by the index included Palm Jumeirah, where prices showed an increase of 2 % quarter on quarter. However, the quarterly figures for both Emirates Hills and Jumeirah Lake Towers fell by 19% during the same period, the report shows.
‘Ensuring the accuracy of market data and relevance to local market conditions is our top priority, which has prompted us to appoint an advisory committee, comprised of academicians and industry professionals from different emerging economies to monitor the quality of the indices,’ explained Ahmet Kayhan, chief executive of REIDIN.com.
‘Furthermore, we have established a Property Indices Oversight Committee to be responsible for reviewing and recommending changes in index policies and procedures, required data elements, qualifying properties, monthly index production review and taking of any other actions deemed necessary to assure index statistical integrity,’ he added.
Meanwhile the latest market report from CB Richard Ellis Middle East says that a high volume of new supply coupled with lower demand continues to affect lease rates across virtually all major residential districts of Dubai.
However, the fall in Q4 was minimal compared to the three previous quarters in 2009.
A comparative analysis of eight residential districts reveals that lease rates have dropped by 41% and 40% in the freehold and non-freehold locations respectively on a year-on-year basis.
It also shows that declining lease rates during the year saw a steady migration of residents to newer locations closer to their place of work and there was also a marked shift towards larger units.
‘Lease rates for residential units are likely to see a further contraction during the course of the year as a substantial volume of new accommodation reaches the final stages of construction,’ said Mat Green, Associate Director for Research and Consultancy.
It is expected that new supply will have the most affect on villa units, with a high number of new developments helping to significantly increase supply in this sector, he added.
