By Andy Sambidge
New Asteco report says Dubai Mall, Fountain have driven demand for residential units.
Apartment sales prices for completed projects in the prime Downtown Burj Dubai area have seen a quarter-on-quarter increase of 8 percent, according to Asteco.
In its Dubai Q3 2009 report, Asteco said apartment prices for Downtown were up from AED1,200 per square foot in the second quarter to AED1,300 per square foot in the third quarter.
It put the increase amid a general slump in Dubai house prices down to "the Dubai Mall, the Dubai Fountain and improved infrastructure in the area".
Across the whole of Dubai sale prices for completed apartments and villas have increased on average by 1-3 percent compared with the second quarter, according to the report.
Rental charges have seen minimal change compared with the same period.
Asteco added that Jumeirah Beach Residence had also seen a 5 percent sales increase as a result of continuous opening of retail units, gyms nearing completion and strong interest in leasing from both Dubai and Abu Dhabi residents.
CEO Elaine Jones said: "Both Downtown Burj Dubai and Jumeirah Beach Residence are highly desirable, fully established communities, which are exactly what the market is seeking.
"A completed tower is no longer enough if it is not part of an integrated community with convenient access to schools, hospitals, transport, leisure and entertainment facilities. In terms of villa communities, The Springs and Arabian Ranches are faring well for the same reasons."
Asteco reported that transactions and enquiries have picked up in line with mortgage availability. Demand, it said, was predominantly for smaller units such as studios and one bedroom apartments, or two and three bedroom villas or townhouses.
"It should be noted, however, that the increased interest in completed communities has resulted in landlords inflating their prices," the report added. "In addition, the option to lease these units is making price negotiations less flexible as the need to sell to generate income is lower."
In the Dubai apartment and villa rental market, Asteco said: "Increased interest and rumours of economic recovery have caused some landlords to raise their rents. But many of these units remain empty for several months due to a significant amount of supply and increased competition."
Overall, however, apartment and villa rental rates have seen minimal changes of in the third quarter of minus 3 percent and 0 percent respectively, according to the report.
Currently, average rental rates for studio apartments are AED45,000 while one, two and three bedroom apartments command AED76,000, AED103,000 and AED139,000 respectively.
Villas and townhouses are available on average for AED117,500 for two bedrooms, AED180,500 for three, AED227,500 for four and AED278,500 for five bedroom units respectively.
Asteco said it had seen a noticeable increase in activity in the leasing market prompting tenants to get better value for their money, either by decreased rents, increased property size, better quality specifications, better amenities and accessibility.
"Despite the Real Estate Regulatory Agency's attempts to provide a rental index earlier this year, it is these influences which are truly driving current rental market activity," the report added.
Investors and tenants alike should not be fooled by the interest in these developments. They are isolated cases of proper planning, infrastructure being completed on time and location. They are not yardsticks for the rest of the dross that is Dubai property. Access to the Marina is hopeless, and almost no other development is without unfinished roadworks and broken promises. Elaine Jones should know better than to even venture a comment on this trend, because it is mendacious.
why would anyone touch a property here that does not give an 8% yield. So if a property is going for aed 100 per sq foot which inludes an aed 20 service charge. Then the net rent is 80, times 12 means the price should be no more than 1000 per sq foot, if we continue to see rent decline due to steady increase in supply, then the value of the property should also go lower.
Dear John what a narrow minded negative person you are. The actual article says Downtown Burj Dubai, any intelligent person will read it as that and not the whole of Dubai. Yes we know the market is has declined alot, but its is interesting to find out if there has been any changes even if its only a little bit. There are some buyers and landlords like me out there who welcome this sort news and it gives me confidence that the market has improved somewhat.
Dear Pauline, Just wishing you all the best & keep hoping..... you will be amazed with all prices by next year..... If you have any to sell do it now if you can.....
Pauline, you completely did not understand the simplest of comments. As for "any intelligent person", that clearly doesn't mean you are included. I was just saying ... Downtown Burj Dubai is one of the isolated cases of proper planning etc., but the air rushing between your ears missed that. Sell well, poor deluded landlord.
when i brought my appartment in JBR we were going to have gyms beach clubs what did we end up with nothing just a couple of holes in the beach between the knocked down oais beach hotel and hilton so dubai properties when are we getting our gyms and beach clubs for at the moment have to go to friends in JLT if want to use the gym