Sunday, August 20, 2006

Villas in Jumeirah and Umm Suqueim reign supreme

Notwithstanding the new freehold stock being added in its neighbourhood, the villas in Jumeirah and Umm Suqueim continue to reign supreme in the leasing marketplace. Already at record levels, these villa rentals showed further gains during the second quarter of the year and attested to their enduring hold in Dubai's real estate scene. At the end of the first six months, average villa rentals were hovering around Dh125,000 for a two-bedroom and Dh140,000 for a three-bedroom unit, according to the latest findings by Asteco.

According to John Allen, Director of Consultation, Research and Valuations at Asteco, "Villa prices in the Jumeirah area are likely to remain high despite new stock entering the market. As demand in these locations is high, rents are likely to continue to rise during the next half of the year."

There have been some suggestions that the handover of the units on The Palm Jumeirah will have some sort of impact on the Jumeirah property scene. The Palm handovers are scheduled to start from late November and stretching up to the first quarter of 2007. So, conceivably, their full impact should be felt from the second quarter of next year.

But Allen is certainly not one among those who believe that The Palm Jumeirah will crimp the leasing scene in Jumeirah. He explains why: "It is unlikely that these new villas will have a material effect on rents in the Jumeirah area as there are a high proportion of owner occupiers and limited supply of rental properties."

Elsewhere in the city, there were rental increases across the board, according to the Asteco findings. Rents in Deira, already on the higher side, are projected to go up further in the second half. The Al Ghusais area, where substantial new stock is being added, is witnessing rents that would have been unthinkable just three or four years ago.

[Article in Property Weekly]

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