Apartment sales prices in Dubai grew on average by 12 per cent in the three months to the end of March with year-on-year growth standing at 27 per cent as residential rates mounted in all areas of the emirate, a report said.

All residential developments in Dubai, especially those with quality buildings or those in prime areas, have continued where they ended 2012 with a strong Q1 2013 performance, added the Q1 2013 Dubai real estate report released by Asteco, a major regional and international real estate services firm.

In comparison to apartment prices, although average villa sales prices only climbed 5 per cent in Q1 2013, growth over the past 12 months averaged 24 per cent.

The performance of rental rates was also impressive, average apartment and villa rents grew by 3 and 4 per cent compared to Q4 2012, but still managed to climb 19 and 21 per cent respectively over the past 12 months.

“The overall outlook is positive with demand and rates expected to continue to grow. However, this will also mean that some tenants and buyers will be priced out of certain buildings or communities,” said John Stevens, managing director, Asteco Property Management.

“Prices are not only being driven by tenants relocating, Dubai is also attracting new tenants and those expatriates here are still tending to take a longer-term view of living in Dubai,” added Stevens.

The areas that came out on top for villa sales in Q1 2013 were the Meadows which jumped 10 per cent reaching Dh11,850 ($3,225) per sq m; Jumeirah Islands which rose 9 per cent achieving Dh13,450 per sq m and the Jumeirah Village which also grew 9 per cent to Dh6,450 per sq m.

Year-on-year villa sales in the Springs grew by 29 per cent to Dh 9,700 per sq m and the Palm Jumeirah remains the most expensive at Dh20,450 per sq m.

In terms of apartment sales the top performer in Q1 2013 was Discovery Gardens which increased by 33 per cent to Dh 6,450 per sq m. The only other double-digit growth was recorded in Dubai Marina and Jumeirah Beach Residence, where rates grew 14 and 15 per cent respectively to Dh12,900 and Dh12,400.

According to Asteco, over the past 12 months once again Discovery Gardens was the top achiever climbing an impressive 50 per cent and again the Palm Jumeirah is the most expensive area with property commanding Dh16,150 per sq m compared with apartments in DIFC and Downtown Dubai, which now change hands for Dh15,600 and 15,000 per sq m respectively.

The Palm Jumeirah remains the most expensive area, with a three-bedroom villa now costing Dh325,000 per annum.

“In terms of supply and demand, Dubai is still benefiting from the Arab Spring and the Euro crisis, which was brought into sharper focus recently with the Cypriot banking crisis. Good quality stock is gradually being reduced while the length of time that advertised units stay on the market now is also shortening,” added Stevens.

Apartment rental rates grew most during Q1 2013 in International City where a two-bedroom unit increased by 8 per cent to Dh40,000, while most other areas recorded up to 3 per cent growth. However on an annual basis, a two-bedroom unit in Discovery Gardens now leases for Dh70,000 a 27 per cent increase.

Downtown Dubai and Dubai Marina followed, notching-up increases of 21 and 22 per cent respectively. A two-bedroom apartment in these developments rents on average for between Dh100,000 and Dh125,000, the report said.

Although the commercial market saw little movement during 2012, it did show some signs of life in Q1 2013. Rental rates in Dubai Investments Park rose 13 per cent to Dh485 per sq m, while JLT and Tecom rose 20 and 25 per cent respectively to command Dh654 to Dh 800 per sq m compared to the same period last year.

DIFC remains the premium destination for office rental with Dh2,400 per sq ft. Q1 2013 office sales prices grew most notably in JLT (9 per cent) and Business Bay (7 per cent), the report said. – TradeArabia News Service