Lease rates have risen by an average of 17 per cent over the past year in Dubai, with some established locations witnessing even higher growth.
According to real estate firm CBRE, average rents for one, two and three bedroom apartments fell 54 per cent between Q4, 2008 and Q4, 2011, but are now rebounding amidst renewed confidence in the Dubai market.
The market has since seen rising activity levels in the popular locations of Downtown Dubai, Dubai Marina, Greens, Jumeirah Beach Residence and Palm Jumeirah with lease rates in these markets increasing by an average of 24 per cent year-on-year.
Matthew Green, head of research & consultancy UAE, CBRE Middle East said: “Dubai is seeing higher rental growth this year due to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations.”
“This is most apparent in established locations with well laid infrastructure and community facilities.
“Over the last 12 months we have also witnessed an appreciation of sale rates, which have averaged 13 per cent in these areas. Sale rates in the Greens and Downtown Dubai developments have appreciated at notably higher rates, reflecting over 20 per cent year-on-year.”
The CBRE report showed that from 2007 to 2011, Dubai residential supply grew by a compound average growth rate of around eight per cent, with apartments increasing by nine per cent and villas by four per cent.
The main growth period was noted during 2007 and 2008 with the delivery of large scale developments at International City and Discovery Gardens developments.
In terms of the villa market, average sale rates for selected developments have dropped by around 30 per cent from the peak, notably lower than apartments. Over the last 24 months there has been a market pick-up in sales performance due largely to the limited supply of quality villas in established locations.
Sale rates in the locations of Arabian Ranches, Meadows, Palm Jumeirah (Garden Villas), Springs and Jumeirah Islands have increased by 16 per cent year-on-year with the highest increase at 22 per cent for Garden Villas on the Palm Jumeirah, followed by Springs and Meadows, which have registered 20 per cent and 18 per cent growth respectively.