Dubai property prices healthy and rising

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Dubai property prices have recorded another robust performance in Q2, which is the fourth consecutive quarter of (strong) leasing and sales growth.

dubai real estate
Dubai property prices continue to ramp upward, as the economic recovery begins to gather momentum. All real estate indicators are trending upward in 2013 for Dubai. Photo-George Shahda

Apartment sales prices grew on average by 12 percent in the three months to the end of June 2013, with year-on-year growth standing at a remarkable 38 percent. In comparison, average villa sales prices in Dubai climbed a respectable 8 percent in Q2 2013, and growth over the past 12 months averaged 24 percent.

The performance of rental rates in Dubai was equally impressive, average apartment and villa rents grew by 7 percent and 6 percent respectively by Q2, compared to Q1 2013 and over the past 12 months have managed to grow 20 percent and 17 percent respectively.

“H2 2013 has not witnessed any slowdown in transaction volumes, leasing or sales growth, while new project launches have become a weekly occurrence.” — John Stevens, Managing Director, Asteco Property Management

A significant number of buyers in Q2 2013 came from the sub-continent and areas affected by regional turmoil, with investors outweighing end users. Also, improved mortgage availability and increased market confidence stimulated sales growth, says the report.

In terms of apartment sales the top performer in Q2 2013 was Discovery Gardens which increased by 17 percent to Dhs7,550 per square metre, taking its performance over the last year to 75 percent.

The Greens recorded 15 percent sales growth in Q2 reaching Dhs12,400 per square metre, taking its annual increase to 44 percent.

Downtown Dubai witnessed an increase of 18% in Q2 (38% year-on-year) remains the most expensive area in Dubai to buy an apartment at 17,750 per square metre.

The best performing areas for villa sales in Q2 2013 were Jumeirah Village which rose 25 percent in Q2 to reach Dhs8,100 per square metre, a 40 percent increase over the past 12 months.

The Springs also recorded 11% growth in Q2 reaching Dhs10,750 per square metre, a 25 percent annual growth rate and Arabian Ranches returned equally impressive increases of 10% in Q2, 19 percent year-on-year with properties now selling at Dhs11,850 per square metre.

“Sales prices should continue to rise as market confidence picks-up in parallel with the improving economy, particularly for villas from aspiring owner-occupiers, that want to jump on to the property ladder.” — John Stevens

Apartment rental rates grew most during Q2 2013 in International City where the annual rental rate for a two-bedroom unit increased by 11 percent to Dhs42,500 — a 27 percent year-on-year increase. Dubai Marina recorded an 8 percent growth (20% year-on-year) where a two-bedroom apartment now leases for Dhs110,000 per year on average.

The Springs and the Meadows were the top performers for villa rental rates in Q2 2013, recording 10 percent and 8 percent increases respectively over the last three months. A three-bedroom villa in The Springs now leases for Dhs160,00 per annum, and the same unit type leases for Dhs240,000 in the Meadows. Average year-on-year rental increases stood at 35 percent and 17 percent respectively.

“As rental demand increases and rates rise, some residents will be priced out of established communities into less developed, more affordable areas. Some may even decide to relocate to more budget-friendly neighbouring Emirates.” — John Stevens.

After showing some signs of confidence in Q1, the commercial market saw continued growth in Q2 2013. Rental rates in Jumeirah Lake Towers (JLT) grew exponentially, recording a 75 percent increase to Dhs1,125 per square metre, which represents a 110 percent year-on-year increase.

Dubai Investments Park rose 33 percent to Dhs650 per square metre, a 50 percent year-on-year increase. Business Bay rose 27 percent in Q2, a 36 percent annual increase at Dhs1,025 per square metre. Q2 2013 office sales prices grew most notably in JLT (17%) and Dubai Silicon Oasis (11%) compared to Q1 2013.

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