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Dubai - 16th April 2016: UAE - The first quarter 2016 real estate review issued by leading local consulting firm ValuStrat -has shown that after a nine month relatively stable residential market, there were minute indications of an early recovery in some areas measured by their VPI, signalling possible signs of a bottoming-out in property values across the coverage locations during the course of the year. The ValuStrat Price Index (VPI) features monthly analysis of multiple properties across 16 apartment and 10 villa locations in Dubai. By applying statistically determined weights to different locations and specifications, it provides a real-time monitor of the city’s property cycle - A useful insight when compared to official transactional data. The first quarter 2016 VPI displayed a 3.5% annual decline in values. However, the general monthly rate of decline has shown no change in residential values. January’s residential VPI registered 97.9 index points while February and March slightly improved for the first time in almost two years, by 0.1% to 98.0 index points. After a nine month relatively stable VPI, research by the consultants reveals that more end users are seeking to get on the property ladder, anticipating long term capital appreciation while saving on monthly rental expenditure. Dubai’s apartment market has shown a slight quarterly improvement in values, up 0.1% while the villa market saw values marginally decline by 0.2%. The median apartment value in March was AED 14,198 per sq m (AED 1,319 per sq ft) and for villas was AED 14,650 per sq m (AED 1,361 per sq ft). In terms of registered residential transactions, median residential prices were 10.4% lower YoY and 2.5% lower QoQ. However some areas witnessed increased transaction volume during this quarter. “…High-end villas priced more than AED 10 million saw about double the number of transactions as compared to the previous quarter. Also, their share of overall villa registrations increased from 5.7% in the last quarter to 11.1% now …” added Haider Tuaima, ValuStrat Research Manager. ValuStrat estimates total supply of residential apartments and villas to be completed this year could amount to 33,662 units. However, as in recent years this volume may be subject to significant downward adjustment - As the year advances and project delays are experienced. Much of the 2016 supply comes from completions carried over from last year. Eight off-plan residential projects were launched in Q1, to add more than 2,000 units to the residential pipeline by 2021. Office transaction prices fell by 9% since last year and 3.1% since the last quarter. Median asking rents for office space remained relatively stable during Q1, with only a marginal change recorded the last 12 months. The median asking rent for office space was AED 1,184 per sq m (AED 110 per sq ft). This quarter saw an additional 38,000 sq m (0.4million sq ft) of retail mall Gross Leasable Area (GLA). 7,502 sq m (80,756 sq ft) of GLA has been added with the opening of The Mall, located in the Jumeirah District, across from the Burj Al Arab and Jumeirah Beach Hotel. The total number of hotel rooms and hotel apartments at the beginning of 2016 stood at 98,333. Five hotels with 1,581 hospitality units were added in Q1, one 5-star, while the rest are 3 and 4-star. Fifteen new hotels were announced to add 4,086 keys to the pipeline over the next three years. The average occupancy during January and February was 85%, down 2% when compared to last year. With increasing new hotel room supply, YoY Average Daily Rate (ADR) for the same period dropped by 11.7% and Hotel Revenue Per Available Room (RevPAR) fell 13.3% YoY.
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