Tuesday, July 21, 2009

Dubai properties on road to recovery

With rents and prices stabilizing, few areas in Dubai are seeing early signs of recovery.

Among the main areas seeing the road to recovery are Dubai Marina, Burj Dubai and Emirates Living. This is largely due to their higher quality and the fact that they are located in a completed community project that seems attractive to people commuting to Abu Dhabi.

Those working in Abu Dhabi are increasingly exploring residential units in New Dubai, due to its proximity to Abu Dhabi. Also tenants are seeking units in community developments.

There is much demand for single and double bedroom apartments and for triple and four bedroom townhouses, said Andrew Chambers, Managing Director, Asteco.

Other established communities such as Downtown Burj Dubai, Jumeirah Beach Residences, and The Springs have received inquiries from tenants, and therefore have been less affected by the rent decline.

The house prices and rent rates in Dubai have considerably reduced during the last quarter reveal the latest industry reports. The apartments and villa prices across Dubai reduced by 15 percent and 13 percent, respectively, on an average.

With the relaxation in finance restrictions and stability in property prices, the Palm Jumeirah has recorded a surge in sales prices for its apartments and villas by 7 percent and 20 percent respectively, during the second quarter, says an Asteco report.

According to the Head of Research and Consultancy at CB Richard Ellis, Matthew Green, the current situation of oversupply, together with weakening demand, both in local and international market, implies that landlords will have to strive extra hard to secure tenancies, contributing to further reduction in rents.

A four bedroom garden homes on The Palm is now being sold for Dh.6.5million, down from the earlier Dh.14million sold during September 2008, the agents said, during the first quarter.

During the second quarter of 2009, the average rent for studios eased from Dh.61,500 to Dh.45,000, rents for single bedrooms fell from Dh.93,000 to Dh.78,000, while that for double bedrooms fell from Dh.132,000 to Dh.107,000. The triple bedroom apartments rents dropped from Dh.185,000 to Dh.149,500.

The average rent for villas were Dh.119,000 for double bedrooms, Dh.176,500 for triple bedrooms, Dh.233,750 for four bedrooms and Dh.277,00 for five bedrooms.

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