Property prices and rents increase in Dubai
|Tuesday, 02 April 2013|
Demand for property in sought after locations in Dubai is increasing and pushing up prices, according to the latest research report from property company Asteco.
The figures show that the average cost of an apartment in Dubai increased 12% in the first three months of 2103 and prices have now risen 27% year on year.
Villa prices are also increasing with the average price in this sector up 21% year on year. And rents are up too, rising 3% for apartments and 4% for villas. It means that year on year apartment prices are up 19% and villa prices up 20%.
‘The overall outlook is positive with demand and rates expected to continue to grow. However, this will also mean that some tenants and buyers will be priced out of certain buildings or communities,’ said John Stevens, managing director of Asteco.
‘Prices are not only being driven by tenants relocating, Dubai is also attracting new tenants and those expatriates here are still tending to take a longer term view of living in Dubai,’ he added.
Dubai, which saw real estate prices decline by over 60% during the economic downturn, has witnessed a gradual recovery in its property market, largely buoyed by a the return of speculative buyers to the residential segment.
Apartments in Downtown Dubai and Dubai Marina saw some of the biggest rental increases, rising 21% and 22% respectively, with an average two bedroom apartment in both areas commanding around AED100,000 to AED125,000 per annum.
Villas in Emaar’s Meadows project saw the biggest rise in purchase price, increasing 10% to AED11,850 per square meter in the first three months of the year, just ahead of property in Jumeirah Islands and Jumeirah Village, which both increased 9%.
Apartments in Discovery Gardens saw the most substantial increase in asking price, rising 33% to AED6,450 per square meter during the first three months of the year. The only other double digit growth was seen in Dubai Marina and Jumeirah Beach Residence, which increased 14% and 15% respectively to AED12,900 and AED12,400.
‘In terms of supply and demand, Dubai is still benefiting from the Arab Spring and the euro crisis, which was brought into sharper focus recently with the Cypriot banking crisis. Good quality stock is gradually being reduced while the length of time that advertised units stay on the market now is also shortening,’ explained Stevens.
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