The price of apartments in Dubai has risen by nearly five percent since the beginning of 2012 and the trend is likely to continue, real estate specialist Cluttons has said in a new report.
Its Q3 market report noted an overall price stability across the emirate and some price rises in specific areas.
It said apartments in Dubai have increased in value an average 4.9 percent since the beginning of 2012 while rental values increased 6.8 percent.
However, Cluttons said there were areas in the emirate that did not see any growth in prices during 2012.
Cluttons said it predicts that prices will remain relatively stable over the next 12 months, as the 24,000 residential units scheduled to be delivered in the second half of 2012 will bring a large stock of supply onto the market making huge price uplifts unlikely.
Its report said the price of high-end villas rose from AED1,100 per sq ft in January to AED1,300.
Mid range villas have also witnessed a rise in sales price from just under AED750 per sq ft in January to nearly AED900.
Cluttons said that villa prices now match those seen in spring 2007, prior to the global economic crisis that resulted in a severe correction in the Dubai real estate market, when prices slumped up to 60 percent.
According to the Dubai Land Department, Dubai property transactions grew 21 percent to $17.15bn in the first half of 2012.
Cluttons said valuation instructions for both villas and apartments have increased by 23 percent since Q4 2011 and 50 percent of these represent mortgages of new property acquisitions.
Cluttons also said that proximity to metro stations in Dubai is now a factor affecting prices.
"The majority of areas close to the metro stations have maintained their demand and in most cases have increased in both capital and rental values," its report said.
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