Dubai’s property sales value climbed 18% to Dhs 34.8 billion in October, while more buyers turned to mortgages as apartment prices stabilised, according to Property Finder data.
Dubai property market sees October recovery
Dubai recorded 11,883 property transactions in October, up 5% from September, marking the first monthly increase after two consecutive months of decline.
The total value of transactions reached Dhs 34.8 billion, compared with Dhs 29.5 billion in September. This brought monthly sales value close to July’s Dhs 34.9 billion, despite fewer transactions.
Residential properties accounted for most of the activity, with 11,294 deals worth Dhs 30.2 billion. This represented a 6% increase in transaction numbers and an 18% rise in value.
Commercial property transactions fell 4% to 589, although their combined value increased 22% to Dhs 4.5 billion.
Resale homes drive Dubai property sales
Resale properties were a major contributor to October’s increase, with secondary market transactions rising 13% to 5,304.
This was 37% higher than the low recorded in May. The value of secondary sales also increased to Dhs 18.1 billion, compared with Dhs 15.8 billion in September.
Off-plan properties recorded higher sales value but almost unchanged transaction numbers. Primary market deals stood at 6,579, compared with 6,593 in September, while their total value increased from Dhs 13.6 billion to Dhs 16.7 billion.
More buyers use mortgages to purchase apartments
Mortgage registrations in Dubai increased for the third consecutive month, rising 5.2% to 3,811 in October.
However, the total value of registered mortgages fell 24.7% to Dhs 7.32 billion, indicating that more buyers were borrowing smaller amounts.
Apartments accounted for 85.8% of all mortgages. The share of apartment sales involving mortgages increased to 34.7% in October, compared with 31% in September and 26.7% in August.
The average apartment mortgage also dropped to Dhs 1.77 million from Dhs 2.67 million in September.
Villa transactions followed a different pattern. Sales reached 1,037, the highest level in four months, but the share involving mortgages fell to 52.1% from 79.2% in September. Meanwhile, the average villa mortgage increased to Dhs 2.87 million from Dhs 2.74 million.
Dubai property asking prices stabilise
Property Finder said asking prices for homes listed for sale remained steady in October following adjustments since February.
Asking rents increased for the second consecutive month after reaching their lowest level of the year in August.
Rental demand also continued to account for most activity on the platform, representing 73% of Dubai property leads in October, compared with 58% in February.
The share of buyer leads increased to 27% from 24% in September, indicating a rise in interest from people looking to purchase homes.
Mid-income buyers return to the market
Cherif Sleiman, Chief Revenue Officer at Property Finder, said the increase in mortgage registrations was an important indicator of market activity despite the decline in total mortgage value.
“Some will look at October’s 24.7% fall in mortgage value and see a weaker market. The more important number is that mortgages rose for a third month in a row. More people are buying, with smaller loans, so the market is getting broader,” he said.
He added, “Applicants earning AED 20,000 to 59,999 a month made up 68.5% of applications on our Mortgage Finder, up from 55.7% in September, and the average apartment loan fell to AED 1.77 million from AED 2.67 million. These are people buying homes they can afford, and the adjustment in asking prices since February has put more homes within their reach.
“Investors have returned to 12.8% of applications, concentrated in the same mid-income bands, and with renters making up 73% of our Dubai leads and asking rents rising again, the rental case is coming back. Dubai’s recovery is being built from the middle. Volumes are still below the start of the year, so there is further to go, but a market with depth is a market that lasts.”
Despite October’s improvement, transaction numbers remained below the levels recorded in June and July, as well as the more than 17,000 monthly deals seen in January and February.
tanvir@dubainewsweek.com
