Dubai apartments value up 5pc in 2012
Dubai, September 27, 2012
Apartments in Dubai have increased in value an average 4.9 per cent since the beginning of 2012, and will continue to rise until the end of the year, said a report.
While apartment rental values have increased 6.8 per cent in Dubai, the averages can be misleading, as there were areas in the Emirate did not see any growth, pointed out the Q3 market report for Dubai’s residential market in 2012, released by Cluttons, a real estate specialist.
Average sales for high-end villas rose from Dh1,100 ($299.40) per sq ft in January to Dh1,300 in September, whereas mid range villas have risen from Dh550 per sq ft to Dh650 per sq ft in the same period, the report said.
Mid range villas have also witnessed a rise in sales price from just under Dh750 per sq ft in January to nearly Dh900 per sq ft in September. The Cluttons report notes that villa prices now match spring prices 2007.
According to the Dubai Land Department, Dubai property transactions grew 21 per cent to Dh63 billion ($17.15 billion) in the first half of 2012, compared to Q3 and Q4 2011.
The internal valuation instructions for both villas and apartments have increased also confirm some 23 per cent since Q4 2011 and 50 per cent of these represent mortgages of new property acquisitions, the report said.
Cluttons has also found that a new factor has quickly begun to affect popularity and prices this past year, which is proximity to metro stations.
The metro transport link has now established itself as a substantial variable, which drives an individual's decision when short-listing property. The majority of areas close to the metro stations have maintained their demand and in most cases have increased in both capital and rental values.
Dubai’s strengthening property market is a reflection of the UAE’s improving economic performance, the report said.
According to a recent Merrill Lynch Global Research Report, Dubai’s diversification model has the right mix to accelerate growth. The report finds that Dubai’s superior infrastructure investment and robust population growth has established solid foundations for future economic growth.
According to Dubai government published figures, foreign investors buying real estate were responsible for acquisitions of Dh28.3 billion ($7.7 billion) in the first half of 2012, up 36 per cent from the same period last year. In addition, trade license applications were up 9 per cent in July 2012 compared to the same monthly period in 2011, according to the Department of Economic Development, giving a strong indication of improved business confidence in the Emirate.
Cluttons predicts that prices will remain relatively stable over the next 12 months, as the 24,000 residential units scheduled to be delivered in the second half of 2012 will bring a large stock of supply onto the market making huge price uplifts or a ‘boom’ scenario unlikely. – TradeArabia News Service