Dubai’s leasing market grew significantly in 2013 as apartment rents surged 50 per cent while villa rental rates grew 20 per cent, according to a report by Asteco.
The emirate’s residential rents also showed strong growth in the last quarter of 2013 as average rental rates for apartments and villas rose 22 per cent and six per cent respectively.
The report attributed the spike in rents to continued unrest in the wider Arab region, Dubai’s successful Expo bid and an expanding economy.
International City recorded a 76 per cent year-on-year rise in rents during Q4 2013 while rents in Jumeirah Lake Towers surged 50 per cent. Rental rates in Discovery Gardens also grew by 44 per cent on average during the period, according to the report.
Among villas, Mirdif recorded the highest growth rate with rents rising by 40 per cent while Arabian Ranches saw a 30 per cent growth in leasing rates.
The Palm Jumeirah continued to be the most expensive area to rent a villa, the report found.
Dubai’s residential sales prices were also up by 60 per cent in 2013, it added.
“Sales prices for apartments and villas rose by 23 per cent in Q4 2013 alone, fuelled by increased confidence and the fact that the new law regulating maximum loan-to-value ratios was not being consistently enforced, although cash buyers still dominated,” said John Stevens, managing director, Asteco Property Management.
“Owner occupiers and investors were keen to enter the market as rental rates were on an upward trend, which indicated better returns and potential for capital appreciation in the medium term.”
Sale prices of Palm Jumeirah villas grew the highest with prices rising by 67 per cent year-on-year in Q4 2013, followed by Jumeirah Village Circle, which recorded a price rise of 55 per cent in Q4 2013.
Discovery Gardens recorded the highest rise in apartment sale prices in the emirate with prices increasing by 83 per cent while Dubai Marina prices grew by 81 per cent.
“We anticipate that 2014 will see a continuation of the trend witnessed in the previous year with sales prices increasing, albeit at a slower pace, as approximately 25,000 residential units are forecast for completion this year,” said Stevens.