Using mortgage transaction data from financial institutions, Colliers International released its House Price Index for the third quarter which showed a 47 per cent decline year-on-year between third quarter 2008 and third quarter 2009.
Property prices in Dubai returned to approximately the same level as those recorded in second quarter 2007 in September.
Apartment prices increased by six per cent quarter on quarter, villa prices increased by nine per cent and townhouse prices increased by seven per cent compared to the second quarter.
The overall volume of market transactions increased by 64 per cent during the third quarter compared to the previous quarter.
“The increased availability of finance and a softening of loan-to-value ratios eased the liquidity concerns of purchasers. Supporting this demand is a perception of improved expatriate job security, excluding the real estate sector. In addition, the ability of purchasers to monitor the actual progress of developments has allowed for greater transparency regarding progress,” the Colliers report said.
Ian Albert, regional director, Colliers International, said that the latest house price index shows the first price increase since the market fell.
“We believe that figures in the HPI Q3 2009 have clearly demonstrated a crystallisation of the property market in Dubai between oases of performance or tier one developments and tier two and other developments,” Albert said.
While units in some developments and areas saw a severe drop in prices this year due to location and quality, others showed more resilience.
Well-planned, mature developments in good locations complete with facilities and a good infrastructure will enjoy highest demand.
Ian Ohan, head of MENA investment transactions at Jones Lang LaSalle, said recently that there is always a year or two in any economy when it proves a prime time to invest.
And JLL have said that 2010 will be that year, a “vintage year” to buy real estate. And with a 50 to 60 per cent rise in investor sentiment in the past six months, investors would seem to agree although there is still some frustration over the lack of investable assets, Ohan said during a conference Thursday.
In CB Richard Ellis’ report last week, the firm said that those developments within a 300 metre radius of Dubai Metro stations will enjoy a positive impact on both prices and occupancy in the long-term.
