Q2 Brings Cheerful News about Dubai Rental RatesMonday, July 02, 2012
Q2 Brings Cheerful News about Dubai Rental Rates A research from property consultants Asteco reveals an increase of 6% in cost of renting an apartment in Dubai in Q2 compared to previous quarter. Research also indicates an increase of 9% on average in villa rates during the same period.
Since residential real estate in Dubai is now indicating signs of recovery, the report also reveals an increase of as much as 16% in sale prices of villas in well-located areas of Dubai. The report also indicates that on average villa price rise is between 6% and 8%.
CEO of Asteco, Elaine Jones, says in a statement that real estate market in Dubai is now heading towards recovery after experiencing limited sales activity and constant decline in rates over the last 3 years. He also highlighted that the major recovery due to higher transaction volumes and increase in values has been seen mainly in established communities of Dubai.
Compared to the previous quarter, rental rates in two posh communities of Dubai i.e. Dubai Marina and Downtown Dubai inched up to 10% during Q2. The average two bedroom apartment in these two areas is being rented for around AED 90,000 to AED 120,000 per annum. Moreover, quarterly report of Asteco indicated an increase of 11% and 13% respectively in the rental rates of two well-healed areas namely Arabian Ranches and Mirdiff.
The preferred unit types include three to four bedroom villas and one to two bedroom apartments in Dubai. After the hit of global financial crises, Dubai real estate experienced prices slumped by more than 60%. Moreover, projects worth billion dollars were kept on hold. Now conditions have been improved and well established areas are showing some signs of recovery.
Nakheel Properties and Emaar Properties posted rise in profits over the last one year and expect more recovery of Emirate’s real estate in the following year. As per Asteco, during the Q2, property prices in Palm Jumeirah, Downtown Dubai and Dubai Marina have reported an increase. Villas in Palm Jumeirah are now the most expensive property in Dhabi.
The report revealed, compared to 8% increase in cost of one or two bedroom apartment in Dubai Marina and Palm Jumeirah, the cost of same sized apartment in Downtown Dubai increased 9%. On the other hand, Arabian Ranches with prices rising 16% saw the largest increase during the quarter.
Jones said while providing future outlook of the market that sales prices are expected to maintain their rising trend for quality developments in villa property type. Improved mortgage options provided by the banks are expected to continue and demand from foreign investors is expected to rise owing to the regional unrest in other parts of the county.