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Transactions up, rents down
Promising second quarter for property sector.
June 27, 2010 2:12 by Samuel Potter
The number of residential transactions taking place in Dubai increased by almost 50 percent in the second quarter of the year, reports Emirates Business. The paper also says that prices rose by one percent compared to the first quarter of the year.
The paper quotes the latest report from Jones Lang Lasalle, “Dubai Real Estate Market Overview for the second quarter of 2010.”
“Although asking prices have marginally declined since the first quarter of 2010, achieved prices increased by one per cent to around Dh867 per square foot. While apartment prices remained stable, villa prices on the other hand, increased marginally during the quarter,” said the report.
But this news appeared to put positive spin on otherwise disappointing results. “The value of residential transactions increased by 50 per cent over the last quarter, although this still represents a decrease of seven per cent over a one-year period,” admits the report.
On the plus side, rents are falling. Rents decreased by four percent from the first quarter of 2010 to the second quarter. Year on year they fell by 10 percent from the second quarter of 2009 to the second quarter of 2010.
Rents for higher-end apartments in Burj Khalifa, Downtown fell the most whereas rents in Dubai Marina and International City decreased only marginally.
Villa rents are also still declining as new supply enters the market. Year on year they fell by 23 percent, says the report.
Jones Land Lasalle expects 26,000 new residential units to be completed this year, and a further 25,000 to be completed next year, bringing the total stock to approximately 320,000 by the end of 2011. The report estimates the current residential stock at around 287,000.