By Staff writer
Chestertons records little or no movement in Dubai property prices and rents during second quarter of 2016
Dubai property prices and rents recorded little or no movement during the second quarter of 2016, according to a new report by Chestertons MENA.
The report said total transactions in the second quarter were down 6 percent at AED26 billion, compared to the previous quarter, but sales transactions were up 17.5 percent.
It added that after a solid beginning to the year when mortgage approvals jumped by over 50 percent, Q2 actually witnessed a 20 percent fall by comparison.
The market will remain slow during Q3 and rental demand will continue to be weak, Chestertons said.
However, it did note that landlords continued to benefit from solid rental yields, especially those owning apartments in the more affordable developments of Discovery Gardens (10.2 percent), International City (9.4 percent) and Dubai Silicon Oasis (7.9 percent), while apartments returned 7.5 percent gross yield across the board on average.
In terms of villa yields, the average across Dubai was 4.8 percent, but the stand out performers were The Springs (6.4 percent), Jumeirah Village Triangle (5.9 percent) closely followed by Victory Heights (5.8 percent).
“Overall, apartments tend to provide a higher average yield than villas and especially those in the more affordable developments. This bodes well for developers of any upcoming projects in Dubai fitting this category, as they will surely attract investors, no doubt pleasing tenants on modest incomes,” said Declan McNaughton managing director UAE, Chestertons MENA.
He said the resilient performance in apartment yields came despite rental rates during Q2 falling on average by 0.95 percent while sales prices were up 0.7 percent on average squeezing margins.
Villa rental rates in Jumeirah Islands and Jumeirah Golf Estates fell on average by 5 percent in Q2 compared with the previous quarter, the report said, adding that villa sales prices were relatively stable in Q2.
McNaughton said: “As for the outlook, in the absence of any major catalyst, the market will remain slow during Q3 and rental demand will continue to be weak. However, the mid to longer term market fundamentals are strong with numerous tourism related projects driving the economy towards Expo 2020.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.