Tuesday, October 08, 2013

Dubai property market still way behind the 2008 peak

The real estate sales and prices in Dubai registered solid growth over the past one year and is set for further increase, while the prices are still unlikely to touch the 2008 peak in the short to mid-term, a report said.

The rentals are lagging 38 percent for apartments and 31 percent for villas, over the same period, revealed a leading property expert, Asteco.

Although prices will increase further, it is unlikely that they will hit their 2008 peaks in the short to mid-term, the Asteco mentioned in its third quarter report for Dubai this year.

Asteco reported that the villa and apartment sale prices in the emirate soared year-on-year by 26 percent and 42 percent respectively, although, they still remain 42 percent lower than third quarter of 2008.
The Asteco report highlights that political stability, trade links and a buoyant and diversified economy, regulatory infrastructure and attractive tax environment have all led to resurgence in transactional activity over the past year, which has led to considerable increase in sales and rental prices.

The Asteco Managing Director, John Stevens, agreed that despite several project launches and increased interest among buyers to purchase off-plan properties, projects with favourable payment plans in good locations saw the bulk of demand.

The best performing areas for apartment sales prices were Discovery Gardens, and Jumeirah Lakes Tower, over the past one year.

When taking into account the 2008-13 performance, Jumeirah Beach Residences and The Greens are below their 2008 peaks. Downtown Dubai is the most expensive area to purchase an apartment at Dh.1700 per square feet on an average.

The outstanding performance in terms of villas over the past one year is the Jumeirah Village, followed by Jumeirah Islands and Springs, Stevens said. But, the most exclusive locations for villa owners is Palm Jumeirah, which commands Dh.2000 per sq ft, with Dh.700 per sq ft more than Jumeirah Islands, and almost double of that in any freehold area in Dubai.

The apartment and villa rentals too, are still below the 2008 Q3 levels by 38 and 31 percent respectively. But, recovery is well underway with 23 percent average rental growth for apartments and 19 percent for villas year-on-year, he said.

The International City outperformed the market over the past 12 months with 35 percent increase.  Downtown Dubai is just 25 percent below its 2008 peak levels, while Palm Jumeirah remains most expensive of the areas surveyed in terms of rents.

In terms of villa rentals, The Springs fared best over the past year, recording 34 percent increase to Dh.165,000 per annum for a triple bedroom house, while villas of same size in Mirdiff grew 31 percent to Dh.120,000 per annum. However, the Pam Jumeirah remains the most expensive places to rent a triple bedroom villa at Dh.350,000, which is below 10 percent of its 2008 peak.

As for the office sector, Stevens said that sales prices have seen little improvement in the past five years, and is still 63 percent lower than the Q3 2008, while the last 12 months saw only minimal increase of 8 percent on average.

Despite the office rental rates being 66 percent lower than during third quarter 2008, the office sector has outperformed residential sector over the past year, rising 43 percent from a low base, the report said.

1 comment:

Angela Davis said...

The value and the prices of Dubai property is showing rising graph. All sectors of Dubai real estate are in the booming stage.
Agents and the experts are hoping that the improvement will be continues in 2014.