Apartment and villa rents in Dubai are showing strong growth as the latest quarterly research from property consultants Asteco shows that the sector is on its way to recovery and prices are also rising.
Apartment rents 6% in the second quarter of 2012 compared to the previous quarter, while average villa rates increased by 9%.
The firm’s report also shows that sale prices for villas in well located areas increased at up to 16% with prices rising on average between 6 and 8%.
‘After three years of declining rates and limited sales activity, the real estate market is on the way to recovery, with established quality communities showing increases in values and higher transaction volumes,’ said Elaine Jones, chief executive officer of Asteco.
Rental rates for apartments in Dubai Marina and Downtown Dubai increased 10% during the second quarter compared with the first, with the average two bedroom apartment going for around AED90,000 to AED120,000 per annum. Rents in well heeled districts such as Mirdiff and Arabian Ranches increased by 13% and 11% respectively.
‘Tenants are relocating in search of value for money. One and two bedroom apartments as well as three and four bedroom villas are the preferred unit types. In terms of rates, quality well managed developments, will continue to set the pace,’ explained Jones.
Dubai’s property sector was hit hard by the downturn, with billions of dollars worth of projects put on hold or cancelled, while property prices slumped as much as 60% in some locations. Now property prices in well located areas are starting to show some signs of recovery. Property prices increased in Dubai Marina, the Palm Jumeirah and Downtown in the second quarter with villas on the Palm Jumeirah now the most expensive in the emirate at AED17,200 per square meter, said Asteco.
The cost of a one and two bedroom apartment in Downtown increased 9% compared to 8% for property in Dubai Marina and Palm Jumeirah. Villas in Emaar’s Arabian Ranches saw the largest increase with prices rising 16%.
‘Looking ahead to the 2012 year end, sales prices will continue to rise for quality developments, especially villas. The number of owner occupiers rose steadily in line with improved financed options offered by banks, which we expect to continue,’ said Jones.
‘Further demand will also be evident from overseas buyers escaping economic woes in the eurozone and political instability in other parts of the region,’ she added.
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