● The Official Dubai House Price Monthly Index saw a rise of 0.54 per cent as the index value moved from 1.115 to 1.121, a rise of 0.006 points
● In May 2020, Dubai Land Department recorded 1,440 transactions worth AED 2.47 billion
● 66.5 per cent of these transactions were in the off-plan market and 33.5 per cent in the secondary market
Dubai, UAE, 28 June 2020 - Dubai Land Department (DLD), in cooperation with Property Finder, launched the third edition of Mo’asher, Dubai’s official sales price index. The base year for Mo’asher is 2012 and the base month for the monthly index is January 2012, with the base quarter for the quarterly index being Q1 2012.
The Dubai sales house index increased by 12.1 per cent in May 2020 compared to the base year 2012, recording a growth of 0.5 per cent in May compared to April 2020. If we take a wider look at the time period, the index has been a 1.54 per cent increase in the past 2 months. For apartments, the index number for May is 1.189, which is the highest it has been since April 2019, and for Villas/Townhouses, it is 1.060, a new level since November 2019.
DLD recorded a total of 1,440 sales transactions worth AED 2.47 billion, with 66.5% in the off-plan or initial sale segment and 33.5% in the re-sale segment. This brings the total to 13,590 sales transactions in the first five months of 2020 worth AED 27.8 billion.
Latifa Ibrahim Ahmed, Director of the Real Estate Studies & Research Department at DLD said: “These figures provided by the index reflect the attractiveness of the Dubai real estate market, even during these exceptional circumstances. The regular release of this index would provide an invaluable tool for developers, investors, landlords, and tenants. In addition, the index aims to establish trust between all parties, improve the transparency of transactions, and ensure that decisions are made based on reliable data. The index contributes to the promotion of our real estate sector and its credibility, helping it to maintain its position among the best global investment centres.'
The overall Dubai sales index number for January 2020 was 1.112 and the Index value was AED 1,072,002. It fell to 1.104 in February 2020 and further declined in March 2020 to 1.100. However, it started increasing again in April 2020 when it hit 1.115 and in May, it strengthened, with an Index number of 1.121. This is an increase of 0.8 per cent since the beginning of the year and an increase of 0.54 per cent month-on-month.
The monthly index number for Dubai apartments in January 2020 was 1.174. It fell to 1.167 in February 2020 and further declined in March 2020 to 1.162. However, it started increasing again in April 2020 when it hit 1.182 and in May it strengthened with an Index number of 1.189. This is an increase of 1.28 per cent since the beginning of the year and an increase of 0.59 per cent month-on-month.
The villas/townhouses index number for January 2020 was 1.051. It fell to 1.043 in February 2020 but rose back up in March 2020 to 1.047. The Index number kept rising in April 2020 when it hit 1.050 before becoming stronger in May with an Index number of 1.060. This is an increase of 0.86 per cent since the beginning of the year and an increase of 0.95 per cent month-on-month.
The most important results
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.
The index that held strong throughout the National Sterilisation Programme during the COVID-19 situation was the Dubai villas/townhouses Index. The reason was rooted in the fact that soon after the crisis, people instantly saw the value in outside, personal spaces, leading to a significant spike in villa/townhouse demands week on week. This trend is still moving upward today.
The index prices are higher in April and May compared to March mainly due to supply. Sellers are now highlight 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.
“Comparing April and May 2020, the overall value of the residential sales price index for Dubai overall recorded a growth of 0.5 per cent in May,” said Lynnette Abad, Director, Research and Data at Property Finder. “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.”
In conclusion, by relying on this index, investors can feel confident about the accuracy of the data provided by Mo’asher. It contributes to enhancing the transparency of the real estate market, with its ability to register the average sales prices and the average square foot price among other important details.