Dubai apartment, villa rents rise, report claims

Rents and sales prices of apartments and villas in Dubai increased in the last quarter compared to the previous one, according to research by property consultants Asteco.
 
Apartment rents and sales prices surged by up to 10% and 9% respectively, while villa rents and sales prices rose by up to 13% and 16% respectively.
 
“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,” Elaine Jones, CEO at Asteco said in a statement.
 
Apartments in Dubai Marina and Downtown Dubai were the most sought after witnessing a 10% increase, with a two-bedroom apartment fetching between AED90,000 ($24,500) and AED120,000 per annum.

“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,” Jones said.

Leasing rates for villas followed a similar trend, stable throughout Q1 2012 with an average increase of 9% through the latter part of Q2 2012. Mirdif showed the largest increase, with rent for a three-bedroom house rising to AED90,000 per annum - a 13% jump from Q1 2012. Double-digit (11%) growth was also recorded in Arabian Ranches, with a three-bedroom villa now costing AED140,000 per annum, the Asteco report said.
 
On the sales front, prices for one, two and three-bedroom apartments in Downtown Dubai, Dubai Marina, and Palm Jumeirah retained their popularity and witnessed price increases of 9%, 8% and 8% respectively during H1 2012. Apartment prices elsewhere in Dubai remained relatively stable, with apartments in JBR seeing a 3% increase.

According to the report, sales price increases for villas were dominated by Arabian Ranchers (16% price increase), The Springs (14% price increase) and Jumeirah Islands (11% increase). For all other developments in the report, prices increased by 6% to 8% with the exception of Jumeirah Village where prices were stable. Prices per square metre now vary substantially, highlighting the contrast in quality, facilities and infrastructure.

Villas on the Palm Jumeirah are now the most expensive in Dubai at AED17,200 per square metre, followed by Jumeirah Islands and the Meadows priced at AED10,750 and AED10,250 respectively. The lowest prices can be found in Jumeirah Village at AED5,400 per square metre.

"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. Further demand will also be evident from overseas buyers escaping economic woes in the Eurozone and political instability in other parts of the region," Jones said.