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Latest Dubai property verdict: Rents down, prices stable
Overseas buyers benefit from exchange rates, while increasing supply pushes rents lower.
July 14, 2010 2:43 by Rasha Reslan
The price of apartments, villas and commercial properties remained stable in Dubai in the second quarter of this year, compared to the previous three months with minimal reductions in villas across just two areas of the city, according to a new report by Dubai-based real estate management company Asteco.
The Asteco Q2 2010 Report said that no change was recorded in the sales price of apartments and offices, according to a release.
“The market is, however, at a stage where pricing can vary from unit to unit in any particular property. We have noticed some overseas clients, who bought property on Palm Jumeirah, are prepared to sell at a much lower price per square foot as the exchange rate is more favourable without them incurring any discount,” said Elaine Jones, CEO, Asteco Property Management.
Villas, meanwhile, also remained on a par with the first quarter of 2010 in all areas except The Meadows and The Springs, where prices declined 5 and 6 percent respectively.
It was a different story on the rental side, says the release, as an increase in the number of units coming online in Dubai over the second quarter of 2010 forced prices down, providing tenants with the opportunity to move to better locations or larger properties. Overall, apartment rents declined an average of 8 percent compared to the first quarter of 2010.
“Although relocation trends from Abu Dhabi and Northern Emirates have slowed due to price correction in those markets, internal movement in Dubai is at its peak with tenants looking for upgrades in terms of quality, size or location. But there is an exceptionally broad range of prices, depending on the motivation of the landlord. As a consequence the rental market, especially for apartments, is very active,” said Jones.
Dubai Marina proved particularly popular with people previously living in Jumeirah Lake Towers attracted by the wealth of amenities. This movement then had a knock-on effect down the price chain as those in Discovery Gardens upgraded to JLT, and people in International City looked for flats in Discovery Gardens.
Villas, on the other hand, fared better with rental reductions of just 4 percent on average across Dubai despite also seeing an increase in supply.