Confidence is returning to Dubai’s property market, with rents in the city increasing marginally during eth first quarter if 2012, according to a report by property management company Asteco.
Rental rates for apartments and villas in Dubai rose by one per cent compared to Q4 2011, while sales prices for villas increased by four per cent during the same period.
The average yearly rent for a one-bedroom apartment in Downtown Dubai was Dhs70,000 during the first three months of the year, up five per cent from the previous quarter, while the average rent for a one-bedroom apartment in Jumeirah Lakes Towers rose by three per cent to Dhs45,000.
“We are seeing further signs that confidence is returning in Dubai as the residential market continues to recover. Rents in some areas have risen as quality developments slowly reach full occupancy,” said Elaine Jones, CEO, Asteco Property Management.
However, apartment and villa rents in Abu Dhabi fell five per cent in Q1 2012 compared to the previous quarter, said Asteco. Rents in some areas like Al Raha Beach fell by 14 per cent quarter-on-quarter because of the increasing supply.
Villas witnessed similar declines with rents falling by 13 per cent in some areas like MBZ and Mussafah, where large amounts of average to low quality stock was handed back to landlords, said the report.
“The increase in supply in the higher-end segment of the apartment rental market in Abu Dhabi is likely to result in further downward pressure on rents,” said Jones.
While 4,455 new residential units have just been delivered in the emirate, another 2,030 are expected to enter the market over the next six months, said the report.