Thursday, June 25, 2009

Dubai heading towards stability in home rents

There are indications of rent stabilization in Dubai, with few landlords still experiencing good demand for higher quality rented homes in prime locations, a leading property consultancy reveals.

Landmark Advisory Group, one of the leading real estate consultancy companies in the region, yesterday released its sales and leasing price maps for the Dubai market.

The Dubai price maps, continues to show evidence of 180 degree turnaround from the earlier supply-driven property market to a demand-driven property market, although, on an average, the consultancy hopes to see further decrease in Dubai rents for the third quarter of the year.

The latest price maps from the consultancy, indicate the distressed sale opportunities have largely been exhausted, as sellers are reluctant to lower existing prices, and buyers sometimes are even paying increased rates for their sought-after residential developments, as only limited homes are available.

According to Director of Research, Jesse Downs, at Landmark Advisory, the Dubai property market shows distinct signs of market stabilizations, and return of confidence from end-users. In a few cases, even the sales prices have increased. This is mainly due to the dynamics of each development.

Small villa developments with limited supply have tapped into sufficient value recognition among end-users with regard to location, layout, and amenities and build quality. These are among those residential developments experiencing increases in prices, such as the Green Community and the Jumeirah Islands. A similar trend is also seen in leasing rates for few villa communities.

However, the price lists indicate a steep decline in apartment prices. The economic downturn, together with large quantity of high-rise apartments that were completed last year, has resulted in over-supply in this sector.

A noteworthy element in the price maps by Landmark Advisory is the constant refinement of price differentiation, which was earlier based on factors such as location, view and quality of finish.

Off-late consumer decision making is based on factors such as environment. Those in proximity to high voltage power lines are going for lower rates, than similar units located away from power sources.

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