MO’ASHER The Official Sales Price Index for the Emirate of Dubai NOVEMBER 2020 MO’ASHER Key Findings The Official Sales Price Index MO’ASHER for the Emirate of Dubai • The Dubai Real Estate market recorded DUBAI HOUSE 3,927 sales transactions in November 2020 worth AED 7.65 billion NOVEMBER 2020 PRICE INDEX • Overall Secondary apartment and villa/ townhouse sales are the highest ever since In November Dubai Land Department recorded 3,927 April 2014 property sales transactions worth AED 7.65 billion. This • Secondary apartment sales in November was 15.6 percent more than October in terms of volume and have been the highest in the past 16 months almost 10 per cent more in terms of value. 38.2 percent of CONTENTS these transactions were from the off-plan market and 61.8 • September, October and November were percent of these transactions were in the secondary market. recording breaking months for Secondary November 2020 confirms the trend that secondary/ready Villa/Townhouses historically villa/townhouses are in high demand after three continuous record breaking months.

As per Property Finder analysis, overall secondary/ready Mo’asher Results apartment and villa/townhouse sales are the highest ever since April 2014. Secondary apartment sales in November • Dubai overall monthly Index recorded 1.076 MO’ASHER‭ - have been the highest in the past 16 months. September, and an index price of AED 1,017,353 October and November were recording breaking months for DUBAI HOUSE PRICE INDEX‭ 3 secondary villa/townhouses historically. • Dubai Apartments monthly Index recorded 1.125 and an index price of AED 957,668 This brings the overall total for real estate sales transactions • Dubai Villas/Townhouses Index recorded this year to 31,693 with a total value of AED 65 billion. 0.997 and an index price of AED 1,663,862 DUBAI SALES PRICE INDEX‭ - MONTHLY 4 Dubai real estate market performance due to the proactive measures taken and protocols set by the Dubai Government is now back to a pre-covid sales transactions records. To date, we have been going toward a V-shaped recovery and when we look at the numbers, from the lowest numbers we had in METHODOLOGY 6 May (1,452 transactions) the market has recovered by almost 270 percent. “Now one expected these trends at the start of the pandemic, but due to Dubai’s Property Finder analysis shows that the top areas for overall resilient real estate market, overall sales in November 2020 were Dubai Marina (14.5 percent), secondary/ready apartment and villa/ Business Bay(10.6 percent), Jumeirah Village Circle (7.4 townhouse sales are the highest ever percent), Downtown Dubai (6.3 percent) and Palm Jumeirah since April 2014” (4.9 percent). 22.4 percent of the transactions were for 1-bedroom units, 21.9 percent for 2-bedroom units and 20.4 Lynnette Abad percent for 3-bedroom units. Director, Research and Data Property Finder Group Looking at proprietary data from Property Finder, the search and demand trends show us that the top five locations for consumers searching for residential units in Dubai were Dubai Marina, Palm Jumeirah, Downtown Dubai, Dubai Hills Estate and Arabian Ranches. Keywords such as ‘furnished’, “ November 2020 transactions were 15.6 ‘upgraded’ and ‘sea-view’ were the top three keywords in the percent more than October in terms of month of November 2020. volume and almost 10 per cent more in terms of value.”

Latifa Ibrahim Ahmed Senior Director of Real Estate Studies & Research Dept Dubai Land Department

MO’ASHER MO’ASHER 3 3 DUBAI SALES PRICE INDEX - MONTHLY DUBAI SALES PRICE INDEX

DUBAI OVERALL INDEX 1.4 INDEX VALUE 1.2 NOVEMBER 2020 1.076

1

0.8 DUBAI OVERALL MONTHLY INDEX 0.6 In November 2020 the monthly index recorded 1.076 and an index price of Month-on-Month - 1.47% 0.4 AED 1,017,353. INDEX NUMBER 0.2 3 Month Change - 2.62%

0 6 Month Change - 4.01% Jul-1 2 Jul-1 3 Jul-1 4 Jul-1 5 Jul-1 6 Jul-1 7 Jul-1 8 Jul-1 9 Jul-2 0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Se p-12 Se p-13 Se p-14 Se p-15 Se p-16 Se p-17 Se p-18 Se p-19 Se p-20 Nov-1 1 Nov-1 2 Nov-1 3 Nov-1 4 Nov-1 5 Nov-1 6 Nov-1 7 Nov-1 8 Nov-1 9 Nov-2 0 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20 Year - Months Index base January 2012

DUBAI APARTMENTS INDEX 1.6

1.4 INDEX VALUE NOVEMBER 2020 1.125 1.2

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0.8 DUBAI APARTMENTS MONTHLY INDEX Month-on-Month - 1.57% 0.6 In November 2020 the apartments index recorded 1.125 and an index

0.4 INDEX NUMBER price of AED 957,668. 3 Month Change - 3.68% 0.2

0

Jul-1 2 Jul-1 3 Jul-1 4 Jul-1 5 Jul-1 6 Jul-1 7 Jul-1 8 Jul-1 9 Jul-2 0 6 Month Change

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 - 5.38% Se p-12 Se p-13 Se p-14 Se p-15 Se p-16 Se p-17 Se p-18 Se p-19 Se p-20 Nov-1 1 Nov-1 2 Nov-1 3 Nov-1 4 Nov-1 5 Nov-1 6 Nov-1 7 Nov-1 8 Nov-1 9 Nov-2 0 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20

Year - Months Index base January 2012

DUBAI VILLAS/TOWNHOUSES INDEX 1.6

1.4 INDEX VALUE 1.2 NOVEMBER 2020 0.997 DUBAI VILLAS/TOWNHOUSES MONTHLY INDEX 1 Month-on-Month + 0.61% 0.8 In November 2020 the villa/townhouse index recorded 0.997 and an index price of AED 1,663,862. 0.6 3 Month Change - 1.48%

0.4 INDEX NUMBER 0.2 6 Month Change - 5.94%

0 Jul-1 2 Jul-1 3 Jul-1 4 Jul-1 5 Jul-1 6 Jul-1 7 Jul-1 8 Jul-1 9 Jul-2 0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Se p-12 Se p-13 Se p-14 Se p-15 Se p-16 Se p-17 Se p-18 Se p-19 Se p-20 Nov-1 1 Nov-1 2 Nov-1 3 Nov-1 4 Nov-1 5 Nov-1 6 Nov-1 7 Nov-1 8 Nov-1 9 Nov-2 0 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20

Year - Months Index base January 2012

44 MO’ASHER MO’ASHER 5 5 HEDONIC Hedonic imputation indices use predicted prices, evaluated at fixed characteristics, based on the hedonic regressions for all time periods. IMPUTATION In doing so, it is possible to evaluate the period t prices of properties INDEX sold in period 0. There are multiple imputation techniques, but three common ones are: Laspeyres, Paasche and Fisher.

LASPEREYES The Laspeyres method imputes period t prices for the properties belonging to the base period sample S(0), evaluated at base period characteristics to control for quality changes. It is also known as a base period weighted index, and it provides a meaningful comparison over time. It helps answer the following question: what would be the relative price today of a real estate unit that was typically offered for sale in the base month?

The hedonic imputation Laspeyres index is an example of a single imputation index in which the observed prices are left unchanged. Using the Laspeyre method, assuming that the log-linear hedonic model holds true for all t periods, the quality-adjusted price in period t is defined as:

PAASCHE The Paasche method imputes base period prices for the properties belonging to the period t sample S(t) , evaluated at period t characteristics. It is also known as a current period weighted index, and reflects current trends. It helps answer the following question: what is the price of a typical real estate unit today relative to the price of the same unit in the base month?

The hedonic imputation Paasche index is an example of a single imputation index in which the observed prices are left unchanged. House price indices serve as important guides that consumers, METHODOLOGY Assuming that the log-linear hedonic model holds true for all t financial institutions, governments and investors look to in order to periods, the quality-adjusted price Paasche index is defined as: understand the market movements of a particular city or country’s housing market. An index will allow one to show the value of an asset over time by tracking its performance. An index is created by selecting a base year in a data set and then indexing that number as 100, which is the natural base for what all other price points will be measured against. When an index is updated monthly it will produce an updated average house price as well as the % changes in price for a given time period such as the last three months, six months or twelve months. The hedonic double imputation Fisher index is found by taking the Mo’asher will be created using a hedonic regression model, which is a FISHER geometric mean of the Laspeyres Price Index and the Paasche Price model that is based on attributes such as view, property size, number Index. It is deemed the ideal index as it corrects the positive price of bedrooms and other important features in a property that have an bias in the Laspeyres Price Index and the negative price bias in the impact on its value. These methods utilize information on the relevant Paasche Price Index. property characteristics to estimate quality-adjusted price indices using regression techniques, though it may prove difficult to sufficient Assuming that the log-linear hedonic model holds true for all t control for location. One of the challenges of building a property periods, the Fisher Price Index is defined as: price index is to isolate the effect of the properties price change over time. Nevertheless, this is challenging because the quality mix in the real estate market is diverse. The characteristics of every property is unique, and it is hard to keep track of individual property features because they continue to be upgraded or modified without informing the authorities. The Dubai House Price Indices are calculated using the hedonic double imputation Fisher index.

66 MO’ASHER MO’ASHER 7 7 Disclaimer At present, we do not provide any accuracy metrics, and although all due care and statistical rigour is taken with the index generation, we do not claim any forecast accuracy. Property Finder and the Dubai Land Department reserve the right to adjust methodologies at any given time, and these changes will be published with appropriate user notes. Users seeking financial guidance from the DHPI do so at their own risk and should note that some external macroeconomic features will not be captured in the model.

The DHPI should not be used for any commercial purposes, including pricing and investment decision making or performance measurement.

You can download a copy of the index from www.datafinder.ae

RESEARCH

Lynnette Abad Mahmoud Ahmed Farghally

Director Research and Studies Specialist Research and Data Department of Real-Estate Studies and Research Property Finder Dubai Land Department [email protected] [email protected]

MARKETING

Faisal Zaidi Manal Mahmoud Haroun

Head of Marketing Corporate Communication Officer Research and Data Dubai Land Department Property Finder manal.haroun@dubailand.gov.ae [email protected]

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