IMF has recommended a change from Dubai current real estate index into a residential property price index (RPPI) to better reflect the trends in the emirate’s property sector.
An IMF mission that held discussions in this respect suggested that regardless of obtaining an overall real estate index covering all types of properties, a RPPI that follows the price trend of the residential buildings should be published as a stand-alone indicator. This is a key indicator for the monitoring of financial stability, it said.
The same applies to commercial properties, standalone indices should be published for each type of activity. Finally, separate indices are needed for residential land and commercial land by type of activity, it was recommended.
Dubai has been publishing a real estate property index from 2016 onwards. The data covered all types of properties namely residential buildings, commercial buildings, and land (residential and commercial). The available main variables are the value, if a flat or a house, the location (area and sector), the size in square meters, the existence of a balcony and of a car parking, information of whether the property is existing or off plan, and procedure type.
But IMF pointed out that the meaning of some variables and its instances remains unclear, for example for procedure type, thus the mission recommended DSC to meet with the DLD to clarify. A meeting of the Fund officials with the Dubai Land Department decided that future data must be improved by adding the built year, that has high number of missing values, and to extent the data to other meaningful variables.
Also published on Medium.
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