By Andy Sambidge
New Asteco report says Palm Jumeirah remains most expensive at AED1,800 per sq ft.
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.
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The mortgage defaults and property foreclosures is a very serious problem for banks and real estate developers are being hurt as home sales fall, making it harder for them to repay loans. UAE banks and lending institutions have begun toughening their lending criteria but also analyst predicts that although the market conditions are tough right now, and this would continue to be so during the next two quarters, an improvement could be expected towards end of the year.http://www.bayut.com/rent.html
Analyst also predict it could be expected to rain towards end of the year.
Itâ€™s really a buyerâ€™s market now for who is looking at a good rental rate. I just want to warn people not to look at price only. A good reliable landlord is worth your money too. I have been blessed by a very good landlord and during the 2005 - 2010 period received a 5% increase of my rent only once, even though the villa is rented below market-rate. I can get nice deals for new villa's now. but because of the history I have seen with this landlord, I remain loyal to stay in his property.
1. As a seller and smart one, why I should lower my product's price if there is no buyer. 2. On the contrary, I have seen and read emails from some realestate agent informing of distress sale and prices lower than launch price. Now I wonder, are realestate prices stable or depends on how badly one needs to sale!!??
The reason for people reducing the price is that there is no one to buy at the rates currently quoted by sellers. And Kirit's argument doesnt make sense...if a person as bought a property by taking a bank loan, now his salary has been slashed and he cannot afford to pay the installments, does he have any option other than to sell it??? Especially with rentals also falling...If a person is rich enough to hold on to the property, yes he can sit on it and wait till prices go up.... but that is not the case with majority of the property owners...