Dubai Property Prices Drop for First Time in Five Years

Tim Elliott (0:00)

It's the Morning Drive, our weekly Wednesday morning Real Estate Roundup. And my guest for the next hour or so, almost an hour, is a Real Estate professional who makes podcasts. He answers all matter, all manner of Real Estate questions in a weekly column in the National Newspaper. And by day, you can find him prowling the corridors at EVA Real Estate.

Mario Volpi, benvenuto.

Mario Volpi (0:24)

Grazie, buongiorno.

Tim Elliott (0:26)

It's very nice to see you. Was I right there? It's benvenuto, is that right? Benvenuti for a lady.

Mario Volpi (0:32)

Benvenuti is plural.

Tim Elliott (0:34)

Is that plural? What would I say to a lady?

Mario Volpi (0:37)

Benvenuta.

Tim Elliott (0:38)

Benvenuto. I've learned something.

Mario Volpi (0:40)

You have. And I've learned something that I prowl the corridors of EVA.

Tim Elliott (0:46)

The corridors of power at EVA Real Estate. Ever or ever?

Mario Volpi (0:50)

It depends where you come from. I say ever, because in Italian it's ever. If it's in English, it's ever, I guess.

Tim Elliott (0:57)

Yeah, I guess so. Do you prowl? I made that up.

Mario Volpi (0:59)

Well, you've been watching the CCTV, haven't you?

Tim Elliott (1:03)

I may have been. I do go about...

I do stride, and I do go around. Issuing directions.

Mario Volpi (1:11)

No, it's a massive office, so I get my steps in, let's put it that way, around. But I don't think I'd like to say that I prowl.

Tim Elliott (1:19)

I was thinking prowling like a panther, like a regal panther, rather than prowling like something else not as regal.

We should leave this behind. We should talk about real estate. Let's move on. Probably. The big story this week is, I think it's fair to say this, to buy home prices drop. For the first time in five and a half years, prices go up and down. I know that there's not anything massive to read into this, but it is worth it, because perhaps we are entering a slightly more mature cycle.

Mario Volpi (1:49)

Yeah, I mean, it's the first time in sort of five and a half years we've actually seen a reduction, and also a reduction in the per square foot price as well, which I think stands at 1,636 dirhams per foot now. It's a small reduction, but still significant nonetheless, because we have seen growth throughout all these years.

But it's not surprising, is it? Let's be honest, I mean...

Tim Elliott (2:14)

It's 1.7%, yeah.

Mario Volpi (2:15)

Yeah, it's not huge, but it is a monthly drop, as it were. But when I say it's not surprising, we've had, obviously, the geopolitical situation has not actually helped us. The summer is traditionally always a quieter period.

And of course, the sort of inventory that's coming on, perhaps more so in the next few years, but still, we've had a considerable number of units handed over. I think those three factors alone, with the geopolitical side being heavily weighted, has pointed to this reduction. And I actually think it's actually quite good, because you cannot have a continual rise in house price inflation, you know, month on month, year on year, forever.

And so I think even without the geopolitical situation, we probably would have seen a stabilization, as we've talked about before, at least a non-growth story. So what is surprising is how small it really is, and how resilient, clearly, UAE is.

Tim Elliott (3:30)

Well, the headline doesn't really tell the story, does it? And so this was, I think this is probably, it's Hallease Times. Do my home prices fall for the first time in five and a half years? There's a big headline. But when you drill down into it, we've had a five and a half year growth streak. This is the first price decline since February 2021 It's 1.7% year on year, at a time when it's been very difficult, as you've said, geopolitically. So we've got transaction volumes cooling, August sales still 23.4 billion, around 10,900 homes, 14% down from July, but it is summer, 24% lower compared to August 2025

But year to date deals, 270 billion dirhams.

Mario Volpi (4:16)

I mean, that's still a considerable sum. It really is.

Tim Elliott (4:19)

270 billion.

Mario Volpi (4:21)

Well, that's right.

So I'm really not concerned at all. And I think even if you're a home owner or a property owner, you shouldn't be concerned.

I think once the situation clears, we have a path to peace, perhaps. You will see how quickly we will rebound back. In fact, I'm already starting to see a lot more activity from the point of view of meetings, viewings, connections, calls, not just from us going out, but also incoming. So I think we're going to have a busy last quarter, to be fair. We always put December down as a bit of a bonus, because it's really all September, October and November are the last three good months to actually do something in the real estate market. Possibly the first week in December, but then again, we've got national holiday as well that week. People start to think about Christmas, and even if they're not following the religious side of things, it's a time for holiday, and a lot of people do tend to go away. So December tends to be a month of not a lot happening. So that's why I'm saying September, October, November, and we're already into first week gone. So we're now marching on to mid-September. I mean, this year has gone very, very quickly.