The villas and apartments in Dubai are likely to see marginal decline in prices during the forthcoming year, with nearly 10,700 new apartments and 1300 villas entering the market during the first six months, says Asteco Property Management, the leading Dubai-based real estate consultancy.
The real estate market in Dubai will be strengthened further, by buyers from other Arab countries, owing to regional unrest and economic uncertainty in other parts of the region, thereby boosting Dubai’s safe haven status.
During the year 2012, villa and apartment rentals in Dubai will remain steady, with only minor declines seen for low quality and poorly managed buildings in certain localities.
The H2 2011 report by Asteco shows that there will be increased number of transactions, with further supply entering the market, leading to increased price competition for owners, while the tenants are offered better choice. However, the report notes that the demand is likely to continue in 2012.
The fourth quarter of 2011 shows that Dubai realty market continues to remain steady for the fourth successive quarter, and with increased transactions, indicating that the Dubai property market is actually recovering, the consultancy points out.
Asteco reports that apartment rentals in prime and mid-market locations stabilized over the fourth quarter, with Nakheel’s International City, being the only project to see a small slide in lease rates. Asteco also reports that there are increased numbers of people re-locating to the emirate, owing to general growth in business performance.
The rental rates for apartments stabilized over the end of 2011, which dropped marginally in the first six months, with International City being the only development to have witnessed minor declines in the fourth quarter.
The average annual rental for a single bedroom unit in Dubai Marina during fourth quarter was Dh.62,500 with double bedroom apartments being sold for Dh.80,000. Rentals for single and double bedroom units on Palm Jumeirah were Dh.90,000 and Dh.120,000 respectively.
The villa rentals were comparatively stable throughout the year. According to Asteco, transactions in the rental market for both categories picked up, as tenants took advantage of lower rates and moved into better quality accommodations, while people relocated to Dubai from other emirates.
Locations such as Discovery Gardens, Dubai Marina, Jumeirah Lake Towers, Sheikh Zayed Road, Downtown Dubai, Palm Jumeirah, Emirates Living and Arabian Ranches, continued to have huge demand.
The selling prices of apartments also maintained their levels in the fourth quarter, following slight declines in the first nine months of the year, although new areas or unfinished developments witnessed further falls.