The story of the property bubble burst in Dubai during the financial crisis in 2008/2009 has become legendary.
However, with Dubai’s economy slowly regaining strength, the real estate sector appears to have bottomed out, and has begun to exhibit signs of recovery.
Sales prices even recorded double-digit increases in certain developments during the first half of this year, according to the latest report from property management company, Asteco.
“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.
Matthew Green, the head of research and consultancy UAE at CBRE, agrees that the values for well-located properties have been firming up for over a year now.
“But this remains a trend for specific assets only and not a market-wide trend,” he said.
“The key beneficiaries of this trend have been established sub-markets such as The Palm Jumeirah, Emirates Living and Dubai Marina. However, even within these markets the situation is highly fragmented with individual properties and units performing differently from one another,” he added.
We compared the average second quarter sales prices for apartments and villas in 2012 and 2011.
1. Arabian Ranches (Villas)
Villas in Arabian Ranches have seen prices shoot up a whopping 24 per cent, from Dhs8,000 per square metre in the second quarter of 2011 to Dhs9,950 per square metre in Q2 this year.
2. Springs (Villas)
Part of the Emirates Living community, the Springs area has been extremely popular for investors, with villa prices rising 19 per cent in the last year to Dhs8,600 per square metre in Q2 2012, up from Dhs7,250 per square metre in Q1 2011.
3. Palm Jumeirah (Apartments)
The Palm Jumeirah area has been performing exceptionally well in terms of property sales, and apartments in the suburb witnessed a leap in sales prices. Rates rose from Dhs12,000 per square metre in Q1 2011 to Dhs14,000 per square metre in Q2 2012, a 17 per cent increase.
4. Meadows (Villas)
Villa prices in the Meadows, which is also a part of the Emirates Living community, jumped 14 per cent from Dhs9,000 per square metre in Q1 2011 to Dhs10,250 per square metre in Q2 2012.
5. Jumeirah Islands (Villas)
Jumeirah Islands saw the rates for villas increase 10 per cent year-on-year during the second quarter of 2012 to Dhs10,750 per square metre.
6. Green Community (Villas)
Residential villas in the Green Community area saw prices increase nine per cent to Dhs7,500 per square metre in the second quarter of this year, compared to Dhs6,900 per square metre during the same period last year.
7. Dubai Marina (Apartments)
One of the few areas in Dubai where apartment prices went up, Dubai Marina has proved popular with expatriates because of its beach views, F&B and retail facilities, say experts. Sales prices rose to Dhs10,750 per square metre in Q2 2012, up 7.5 per cent from Dhs10,000 per square metre in Q2 2011.
8. Palm Jumeirah (Villas)
Villas in Palm Jumeirah didn’t perform as well as the apartments in the area, but sales prices still managed to rise 7.5 per cent year-on-year to Dhs17,200 per square metre as of the second quarter of this year.
9. Greens (Apartments)
The last among the gainers on our list, the Greens area saw apartment rates increasing from Dhs8,250 per square metre in Q2 2011 to Dhs8,600 per square metre in Q2 2012, a four per cent hike.
1. Discovery Gardens
Mainly due to oversupply, prices of apartments in Discovery Gardens have fallen drastically, from Dhs5,500 per square metre in Q2 2011 to Dhs4,300 per square metre in Q2 2011, a drop of 22 per cent.
2. Jumeirah Lake Towers
The other area that saw a sharp decline in rates was Jumeirah Lake Towers (JLT), where prices fell 10 per cent to Dhs7,000 per square metre in Q2 2011 as compared to Dhs7,750 per square metre during the same period last year.
Sources: Asteco/CBRE Ellis