Dubai’s residential rents rose by 10 per cent in 2014, with values staying flat during the last quarter, according to a report by MPM Properties, the real estate arm of Abu Dhabi Islamic Bank (ADIB),
Meanwhile home prices in the emirate rose 15 per cent in 2014, recording a four per cent growth during the last quarter.
These estimations are slightly lower than the 2014 figures released by property consultant JLL, which reported a 15 per cent growth in rents and a 20 per cent increase in selling prices for residential units.
The ADIB report noted that although 2014 overall marked a year of further growth for Dubai’s real estate sector, the decline in values towards the end of the year improved net yields to more sustainable levels.
“This market adjustment is viewed as healthy for the long term growth of the market,” the report said.
In addition, new supply to the market has also led to a fall in values across some areas in Dubai.
Average transaction values on Palm Jumeirah declined over 2014, driven in part by a readjustment by developers on the entry level price points of new products being offered to the market, the report said.
Smaller communities in the DIFC also saw values dipping with the arrival of new inventory.
The later half of 2014 saw the launch of a number of new projects by developer such as Damac, Danube and GGICO.
Overall, over 50 projects were launched in the off-plan market across Dubai in 2014. They are expected to deliver over 13,000 units to the market, according to MPM Properties research.
Meanwhile mid-tier properties such as Remram and International City saw an increase in transactions, aided by a growth in rents, the report added.
Dubai’s affordable housing stock is also set to expand with supply slated to come in areas such as Sports City, Jumeirah Village Circle and Al Furjan. Off-plan properties that fall under the affordable spectrum are also being launched in areas such as Meydan and Dubai Creek Harbour, the report said.
Dubai’s real estate market has slowed in 2014 after a period of rapid growth, which saw both prices and rents growing more than 30 per cent in two years.
According to data released by Dubai Land Department, real estate transactions in the emirate fell 7.6 per cent to reach Dhs218 billion last year.