Dubai’s residential property market appears to have bottomed out, as prices are currently at rates similar to early 2008 levels, Jones Lang LaSalle (JLL) said in its quarterly report on the Dubai real estate market.
“Despite seeing a sharp fall from its peak levels in the third quarter of 2008, the villa market began to see some uptick towards the end of 2011. This trend has continued into 2012 with sale indices now three per cent higher than in January 2008,” JLL said, quoting price indices from Reidin.com.
However, the report clarified that real estate prices were still much lower than their peak in 2008.
“Villa sale indices are still 25 per cent lower than at their peak in the third quarter of 2008. Apartment sale indices have also begun to stabilise but remain at lower levels, 34 per cent down on the peak in the third quarter 2008,” it said.
During the first quarter of the year, around 3,000 new residential units were added to Dubai’s property market, bringing the total residential stock in the emirate to around 341,000 units, JLL said.
“While liquidity is returning to the residential market and some previously stalled projects are recommencing, we expect that a substantial proportion of the supply due to enter the market in 2012, much of which was initially due to complete in 2011, will experience further delays,” the report said.
According to JLL, Dubai’s rental market is starting to witness a positive trend. While rents for villas have increased five per cent from 2009 levels, apartment rents are still up to 30 per cent lower, according to Reidin’s rent indices.
“The villa market is expected to continue to outperform the apartment sector. The prime residential assets in well established locations continue to see improved performance, while secondary buildings and locations are still suffering from rental and pricing declines,” JLL said.