House prices in Dubai moved into positive territory for the first time in two years in the second quarter, according to Cushman & Wakefield Core.
The property consultancy said that after seven consecutive quarterly declines, Dubai’s residential sales market witnessed a 1 per cent marginal quarter-on-quarter growth in the three months to June.
Transaction volumes also picked up during the period, and were 5 per cent higher than in the first three months of the year.
David Godchaux, the chief executive of Cushman & Wakefield Core, said that it was "too soon" to cite this as a revival in the market, especially as sales activity in the third quarter is likely to to be weaker due to the slower summer months.
"Nonetheless, we expect transactions to gather momentum again throughout Q4 2016 and into 2017, providing there are no external shocks affecting the market sentiment," he said.
He believes that many investors who waited on the sidelines for the market to bottom out "are slowly going ahead with their buying instructions as the prices have hit a plateau across most of Dubai’s submarkets and are showing resistance to further drops".
"Furthermore, landlords who wish to sell in this bottoming market are also keeping realistic reserve prices."
House prices should also be supported by the fact that expected delivery numbers should once again fall below forecasts in 2016, with just 35 per cent of anticipated new supply likely to be handed over.
In the first six months of the year, just 3,000 new homes were delivered in Dubai, and the company only expects 5,500 to be completed during the second half of the year.
In terms of areas, The Springs and The Meadows were the top-performing villa districts, reporting a 3 per cent increase in prices on the first quarter, although they remain 7 per cent lower than in the same period last year.
Jumeirah Village was the weakest villa district — prices dropped by 5 per cent quarter-on-quarter and are down 17 per cent year-on-year.
In terms of apartments, the only district to witness a sales price rise was Discovery Gardens, which was up 4 per cent on the first three months. Again, apartment prices in Jumeirah Village were down by 5 per cent.
Rents were largely flat in most of the city’s communities, but in Emirates Hills and Palm Jumeirah villa rents dropped by 2 per cent and in Dubai Sports City and Dubailand they dropped by 3 per cent. Al Barari witnessed the biggest decline — down 4 per cent.