Hint of Firmer Home Prices

Sales prices for homes in Dubai have stopped falling and in some areas are edging upward, though rentals rates continue to drift lower, a property consultancy said on Tuesday. The findings of Landmark Advisory add to a small but growing body of evidence that suggests at least parts of the emirate’s battered real estate market might be on the mend. Signs of a turnaround are strongest in upscale neighbourhoods with a limited supply of empty homes, such as Jumeirah Islands and Green Community, where villa prices are getting firmer, said Jesse Downs, Landmark’s director of research. “For the Dubai market, there are distinct signs of market stabilisation and a return of confidence,” Downs said in the June issue of Landmark’s monthly property report. This conclusion follows other recent signs of a potential recovery in residential property values.

The Khaleej Times-Asteco June rental monitor also showed that home prices are starting to stabilise in Dubai. HSBC bank said last month that the prices of property transactions in Dubai and Abu Dhabi rose by 4 per cent in April and an additional 5 per cent rise in May. “For potential home buyers, ‘distressed sale’ opportunities are largely finished, as sellers refuse to lower existing prices, and buyers in some cases are paying increased rates for sought-after residential developments with limited homes available,” the report said. However, rental rates are squishy, especially in East Dubai, and they may soften further during the summer due to the economic downturn and an expected oversupply of new high-rise apartments. Rents for some apartments in the Bur Dubai-Al Mankhool area slid by more than 10 per cent from May to June, the report said