Rental costs for apartments and villas in Dubai increased by an average of 2 percent and 3 percent respectively in the 3Q2012, compared to the previous quarter, according to Asteco’s latest market report.
The real estate services firm’s quarterly market analysis showed that two-bedroom apartments in the upmarket Sheikh Zayed Road and Downtown Dubai districts witnessed the biggest increases in annual rents, rising 6 percent to AED105,000 (US$28,600) and 4 percent to AED120,000, respectively.
Rental costs for a three-bedroom villa on Nakheel’s Palm Jumeirah were up on average 7 percent to AED325,000. The Spring and Arabian Ranches, another two well-heeled areas, saw the average price for similar properties up 5 percent to AED125,000 and 4 percent to AED145,000 respectively.
“The increasing rental rates are due to the lack of a certain unit type, whether that is larger three-bedroom units in towers or smaller townhouses in villa communities,” said Elaine Jones, CEO, Asteco.
“The reason for the shortage of a particular unit type is either the low number of units initially available or high occupancy rates within certain developments.”
Sale prices in the emirate remained stable in the third quarter, partly due to a lack of enquiries during the Islamic holy month of Ramadan, which held back any significant pickup in sales activity.
The only residential district to witness a notable rise in apartment sales prices was The Greens, where they were up on average 3 percent to AED8,800 per sqm. Dubai’s priciest areas for apartments, DIFC and Palm Jumeirah, both commanded about AED14,000 per sqm.
Apartments on the Palm continued to be the most expensive on average in Dubai with asking prices of AED17,200 per sqm.
Sales prices and rental rates remained unchanged, Asteco said.
“One trend we have noticed is that tenants and or buyers of office space are demanding significant discounts and incentives before committing. This is likely to continue as more supply enters the market,” said Jones.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.
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