Friday, April 16, 2010

Dubai rents stable due to increased demand from neighbour emirates

Rents in Dubai have been stable last month, owing to increase in demand from residents of neighbouring emirates, although property prices have seen a dip due to oversupply, said the latest report by Deutsche Bank.

The rents of apartments and villas grew by 1.1% and 1.3% in March this year, the report by the Bank pointed out.

However, the prices of apartments and villas fell by 1.1 percent and 1.7percent respectively in March 2010, compared to previous month, said the report, which is based on the proprietary price index by the Bank covering 13 main locations in Dubai.

An official at the Bank who spoke to the media, mentioned that migration from other emirates to Dubai have led to increased demand. Moreover, several people have upgraded for better properties and have shifted to Dubai from Sharjah and other Northern Emirates. Several workers in Abu Dhabi, actually live in Dubai, given, the cheaper quality housing here.

According to analysts, Dubai has shown stability for almost eight months now, although the monthly data seems volatile. The fall could be owing to new supply, with Sports City and Business Bay being the most affected locations.

Housing oversupply and lack of financing are the hurdles to any possible recovery in the property market, the note said.

The leading real estate research company, Cluttons, last week said that average residential rent has declined by more than five percent in the first quarter, although the market is yet to bottom out in terms of pricing.

No comments: