Dubai property sector ‘on recovery path’
Dubai, August 5, 2012
The Dubai property sector is showing strong signs of recovery following the 2008/2009 crash that hit Dubai investors during the international financial crisis, said a report.
“The real estate market in Dubai is finally showing signs of a return to positive growth, the market is indicating that these increases in property values are being driven in communities populated by expats, reinvigorating investment in the UAE,” said Alicia Buller, editor of gulfbusiness.com, citing a report from property management company Asteco.
Emaar's Arabian Ranches is the top performer according to the report. The villas saw prices rise 24 per cent, an increase of nearly Dh2,000 ($544) per sq m over the comparison period in the report, which took the average second quarter sale prices in 2011 and 2012 of villas and apartments in Dubai.
The villas in the Springs, part of the Emirates Living community, and apartments in Dubai Palm Jumeirah, traditional expat communities, saw property prices 19 per cent and 17 per cent respectively.
Villas properties performed the best in Dubai, with six out of the top nine areas being those heavily populated with villa properties, traditionally areas where expats are able to purchase and rent properties.
Outside of the top three areas listed above, the villas in Dubai, which performed well over the past year, include the Meadows, Jumeirah Islands, the Green Community and Palm Jumeirah, a Nakheel development.
Although the villas on the Palm saw a smaller percentage rise than apartments at only 7.5 per cent, these villas are at the top end of the market with an average five bedroom 5,200 sq m villa fetching Dh12 million ($3.26 million).
"After three years of declining rates and limited sales activity, the real estate market is on the way to recovery, with established quality communities showing increases in values and higher transaction volumes," said Elaine Jones, CEO at Asteco.
The apartments in Dubai are also performing, again in areas where the expat community buy and rent property, in Dubai Marina where prices rose 7.5 per cent and in the Greens where apartment values increased by 4 per cent.
This growth in the market is was also seen in a recent Gulf Business report on Dubai rentals, which shows an increase of 2 per cent over the year to the end of quarter two, which further points to an emerging recovery in the real estate sector.
According to the Asteco report, properties in Dubai that are not performing well, point to oversupply in areas that have not completed the development phase.
Prices fell 22 per cent at Discovery Gardens and up to 10 per cent in Jumeirah Lake Towers in the second quarter compared with the same period last year, the report said.
Some areas remain flat, particularly apartments in DIFC and the Downtown area where a large number of properties have come on line over the past year and have affected growth of existing properties in the area.
As the year progresses, sales prices will continue to rise for quality developments, particularly villas, according to Asteco.
"The number of owner-occupiers rose steadily in line with improved financed options offered by banks, which we expect to continue,” said Jones. – TradeArabia News Service