Latest data suggests slowing in residential markets in UAE
The residential property market in the United Arab Emirates seems to be going through a period of stabilisation with some locations seeing growth and others recording a slowdown.
In the first quarter of 2016 sales and rental prices in upcoming, inland neighbourhoods across the UAE are rising while in prime areas they are falling, according to the latest property report from classified website Dubizzle.
It records an increase of up to 13% in sales and rental prices in emerging locations such as Al Ghadeer, Al Reef and Al Furjan, when compared to the first quarter of 2015.
For example, property sale prices in Abu Dhabi’s Al Ghadeer and Al Reef rose by 3% and 4% respectively when compared to the same quarter in 2015, while rental prices for one and two bed apartments in Al Reef rose by 9% while three bed apartments in Al Reef rose 11% and in Al Furjan in Dubai rents for one bedroom apartments increased by 13%.
Meanwhile, prices in more established, central areas have dropped, for example rents dropped by 10% for one and three bedroom apartments in Abu Dhabi’s Corniche when compared to the first quarter of 2015.
The same trend was seen in Dubai, where sales prices for properties in mature locations such as Business Bay, Dubai Marina, Downtown Dubai and Jumeirah Lakes Towers fell by between 8% and 10%.
Business Bay saw rents for one bedroom apartments fall by 5% and two bedroom apartments were down by 4% while the rental price for three bedroom apartments remained unchanged.
Data from property firm Bayut also records falls in some locations in Dubai in the first quarter of 2016. Rents were down by 3% year on year and sale prices down 6%.
The firm believes that as more and more households move to the suburbs, investment opportunities in areas like Dubailand and Dubai Sports City could become more enticing. It suggests that the increased popularity of these localities coupled with low property prices has resulted in rental yields as high as 9%.
‘We think Dubai’s suburbs are ideal for both new home buyers who can still benefit from low prices and investors, who can enjoy impressive rental yields thanks to these areas’ rising popularity,’ the report says.