Quality Dubai property remains steady
Dubai, October 11, 2011
Dubai property market was steady again for quality buildings in established locations for the third consecutive quarter as villa rents and sales prices remained stable, said a report by UAE property management firm Asteco.
Sales prices and rents for villas remained constant, while the apartments sector withessed a minor decline in rents and sales prices at 1 per cent and 4 per cent respectively, it stated.
The office market witnessed slight declines of 3 per cent for sales and leasing, according to the latest Q3 2011 report from the company.
“In actual fact this is the third consecutive quarter that quality buildings in established locations have experienced steady sales prices and rental rates” said Elaine Jones, CEO, Asteco Property Management.
Sales prices and rental rates for villas remained constant due to a lower number of sales transactions and rental relocations over the summer months, a period when traditionally many families take annual holidays, which this year also coincided with Ramadan, she noted.
'Although sales prices for apartments were stable in sought after locations such as the Palm Jumeirah, Jumeirah Beach Residence and Dubai International Financial Centre, properties in Discovery Gardens experienced a 10 per cent drop,' Jones said.
This was the result of individual landlords selling at reduced rates after being unable to attract tenants to cover their mortgage payments, she added.
According to her, Nakheel released a significant number of units at reduced rental rates in Discovery Gardens, which, coupled with the high service charges, forced some owners to sell at a reduced price.
Overall rentals remained relatively stable over the summer months with only the Discovery Gardens as well as International City and Jumeirah Lakes Towers experiencing minor declines of 2 per cent due to high volumes of supply.
Quality buildings in established developments however continue to hold their value as demand both from newcomers and ‘local’ relocations has been rising, said the expert.
'Whether this increased demand has any stamina will depend on micro and macro economic developments,' observed Jones.
'Confidence in the Dubai property market could be severely tested if the threat of a global double-dip recession materialises, although fears of that happening have eased with a better than anticipated September US jobs report,' she added.
On the office scenario, Jones said in general this sector was steady, with only Business Bay and Tecom C witnessing declines in sales and leasing rates due to subdued demand and increasing supply.
'Two existing trends that became even more pronounced during the third quarter were the rapidly declining demand for shell and core office space with tenants demanding fitted space and proximity to Dubai Metro stations being high on the list of tenant requirements,' she added.-TradeArabia News Service