1. Compare inside the building first
Most price comparisons in Dubai are between communities or buildings. Those differences mix everything at once: location, developer, age, amenities, service charges. Some location effects are well documented. A study of the Dubai Metro, for example, found that the metro's positive effect on residential sale values was largest at 701 to 900 metres from a station, at about 13% (Mohammad, Graham and Melo, 2015).
But once you compare two units in the same building, all of that is shared and drops out. What remains are the differences between the units themselves: floor, view, orientation, noise, layout, size and finish. Statistically, this is called a building fixed effect. In plain words: hold the building constant, then look at the unit.
2. Correct for timing
A unit sold at the top of a cycle and its neighbour sold after a market correction are not comparable at face value. Prices for the whole building moved in between. Any fair comparison removes the market movement first, for example by comparing each sale with others in the same quarter. The same applies to the off-plan premium, which itself changes from year to year.
3. Use registered prices, not asking prices
Listing portals show what sellers hope for. The Dubai Land Department registers what buyers paid. The gap between the two is information in itself. If a unit is listed at AED 2,000,000 and registers at AED 1,850,000, the gap is 7.5%. Across a building, a widening gap suggests that bargaining power is moving to buyers. A gap close to zero suggests the opposite. We use registered prices for comparison and the gap as a measure of liquidity.
4. Keep bulk deals apart
When several units change hands in one deal, the price per unit usually reflects a negotiated discount. Research on Dutch land registry data finds that real estate portfolios most often trade at a price discount (Ishaak, Liu, Hardeman and Remoy, 2024). Mixed into an analysis of single-unit sales, such deals would make some units look cheaper than they are. Bulk deals are not flagged as such in public transaction data, so they have to be identified, for example as clusters of same-day sales in the same project, and modelled separately.
Why this matters for portfolios
A portfolio is a set of individual units. If unit-level differences are real and predictable, choosing the right unit in a building matters as much as choosing the building. And if they are not, a buyer should not pay extra for them. Either way, the answer has to come from registered transactions, compared fairly. That is the work we are doing at UAE Portfolio. See the methodology.
Sources
- Ishaak, F., Liu, P., Hardeman, E. and Remoy, H. (2024). Portfolio sales: price premium or price discount? ERES working paper eres2024-206.
- Mohammad, S. I., Graham, D. J. and Melo, P. C. (2015). The effect of the Dubai Metro on the value of residential and commercial properties. Journal of Transport and Land Use.
This article is general information, not investment, legal or tax advice. UAE Portfolio is a validation-stage project and not yet licensed. Join the waitlist to follow the research.