Residential developments in Dubai bounced back during second quarter of the year, with average rent increases of six per cent for apartments and nine per cent for villas, according to the latest report released by property management company Asteco.
Apartments in some areas like Dubai Marina and Downtown Dubai saw a 10 per cent increase in rents, with a two-bedroom apartment fetching between Dhs90,000 and Dhs120,000 per annum.
In terms of villas, Mirdiff showed the largest increase with rent for a three-bedroom house rising 13 per cent from Q1 2012 to Dhs90,000 per annum. Double-digit growth was also recorded in Arabian Ranches, with a three-bedroom villa now costing Dhs140,000 per annum.
“Tenants are relocating in search of value-for-money, one- and two-bedroom apartments as well as three- and four-bedroom villas are the preferred unit types,” said Elaine Jones, CEO at Asteco. “In terms of rates, quality well managed developments, will continue to set the pace.”
In terms of sales, prices for apartments in areas like Downtown Dubai, Dubai Marina, and Palm Jumeirah rose between eight to nine per cent, while apartment prices elsewhere in Dubai remained relatively stable, the report said.
“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 Jones.
For villas, Arabian Ranches saw sales prices go up 16 per cent, The Springs saw a 14 per cent price increase and Jumeirah Islands also witnessed an 11 per cent hike in prices.
“For all other developments in the report, prices increased by six to eight per cent with the exception of Jumeirah Village where prices were stable. Prices per square metre now vary substantially highlighting the contrast in quality, facilities and infrastructure,” the report said.
Villas on the Palm Jumeirah are now the most expensive in Dubai at Dhs17,200 per square metre, followed by Jumeirah Islands at Dhs10,750 and the Meadows priced at Dhs10,250. The lowest prices can be found in Jumeirah Village at Dhs5,400 per square metre.
“Looking ahead to the 2012 year end, sales prices will continue to rise for quality developments, especially villas,” said Jones.
“The number of owner-occupiers rose steadily in line with improved financed options offered by banks, which we expect to continue. Further demand will also be evident from overseas buyers escaping economic woes in the Eurozone and political instability in other parts of the region,” she added.