New ‘dynamic’ index to track Dubai property trends

By DG Staff

Business Bay

DUBAI 23 November 2019: Property Monitor has announced the launch of Property Monitor Dynamic Price Index (PMDPI) – a new real estate market index family covering property price movement in Dubai.

Apart from providing a macro-level view of Dubai with January 2008 as the base period, the indices cover in depth 42 geographic communities of the emirate.

The next-generation family of indices leverages a vast pool of historical datasets, proprietary algorithms and machine learning to most accurately capture the underlying trend in property values. These datasets are intended for use by Property Monitor’s banking clients, regulators and other property professionals who require a level of accuracy and data integrity that goes beyond simplistic indices based primarily on ‘asking prices’.

As a unique feature, the PMDPI dynamically repopulates by incorporating any new datapoint or dataset that becomes available, overcoming any historical inaccuracies or misrepresentation of values and trends. Since it uses the fullest dataset available, the PMDPI will always reflect the most up-to-date and accurate information.

Zhann Jochinke, Chief Operating Officer, Property Monitor said, “In emerging markets like ours, additional information often becomes available when historical data is digitised and when previously confidential datasets or those with limited access are made public. The Property Monitor Dynamic Price Index has been designed to dynamically reflect these additional datasets to provide the latest and most accurate view of the real estate market, which is a key pillar of the Dubai and UAE economy. Our latest innovation aims to provide a holistic solution to our banking sector clients and property professionals to help them take informed decisions and derive maximum benefits.”

To further limit the possibility of the distortion of data, PMDPI follows a strict cleansing process whereby extreme values, outliers and atypical, potentially erroneous datapoints are removed from the dataset.

The index family is calculated using a moving average algorithm of median prices and the Dutot price index formula. The 3-month rolling average allows the indices enough time to sufficiently react to the short-term price movements but prevents misrepresentations caused by one-off events such as the release of a large amount of property supply into the market or any unusual, high-value transactions.

The new indices naturally replace the previous generation of Property Monitor price movement and indexation products which were compiled in collaboration with leading property consultancy and chartered surveying firm Cavendish Maxwell.

Sofia Underabi, Partner, Head of Residential Valuation at Cavendish Maxwell said, “Property Monitor is playing a lead role to fulfil the market’s objectives to implement enhanced automation techniques and achieve technological advancement. Key to its derived solution is Property Monitor’s understanding of local and international regulatory requirements along with the technologies required to align with the Fintech strategies of the region’s key sectors including banking and real estate. The new index family is a leap forward in this direction.”

The PMDPI will provide updates on a monthly basis, releasing findings within the first working week of the month.

Dubai Gazette