Dubai house prices stable in Q2, rents decline further

 

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, Asteco said on Wednesday.

 

Its Q2 2010 Report saw no change in the selling price of apartments and offices, with flats in Dubai International Financial Centre (DIFC) and on Palm Jumeirah still commanding the highest prices.

 

However, oversupply drove continued declines in the rental markets with average apartment rents down by 8 percent in Q1 compared to the previous quarter and villa rents down by 4 percent.

 

Palm Jumeirah villas remained the most expensive at AED1,800 per sq ft, with the Green Community at the opposite end of the scale with villas selling for AED700 per square foot. See the Arabian Think Tank's latest views on Palm Jumeirah prices .

 

Elaine Jones, CEO, Asteco Property Management, said: “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."

 

Villa prices 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 due to large supply of properties, the report added.

 

Asteco's report also said apartment rents declined an average of 8 percent compared to the first quarter of 2010.

 

Jones said: “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.”

 

Villas fared better with rental reductions of just 4 percent on average across Dubai despite also seeing an increase in supply. Villas in Jumeirah proved the most resistant, seeing falls of just 1 percent thanks to its established community, the report said.

 

The Dubai Q2 2010 Report found that office rents still showed a downward trend while sales activity was stable with no price adjustments. Jumeirah Lake Towers outshone all other areas with the development accounting for half of all transactions.