Dubai's real estate rental sector saw the first signs of stabilisation for nearly two years during the first quarter of 2011, Asteco said on Wednesday.
The property management company said apartment rents averaged a decline of just two percent over the quarter, although drops of as much as seven percent were seen in some areas.
Its Q1 report said popular destinations such as Discovery Gardens and Dubai Marina fell by six and four percent respectively, but with high transaction activity due to increased affordability.
Villa rents and sale prices showed virtually no change since last quarter, Asteco said, adding that further declines were likely as more supply is set to be handed over in coming months.
Apartment sale prices also showed signs of stability, with prices easing by just one percent during the first quarter of 2011, much slower than the four percent seen in Q4 2010.
Elaine Jones, CEO, Asteco Property Management, said: "The rental market stabilised in certain areas, with a downward trend in others, albeit at a lower rate. This is attributed to the pressure of new stock on the already oversupplied market, especially for apartments and offices. Internal movement is still high and is predominantly driven by a flight to quality and value for money."
She added: "Transaction activity is on the rise, and as sentiment increases this will continue, with returning stability also aided by finance becoming more readily available."
Asteco said that significant falls in office rents continued, with declines of 10 percent during Q1, although this was half the declines seen in the previous quarter.
In office sales, transactional activity remains subdued, with prices dropping three percent over the quarter.
Jumeirah Lake Towers fell four percent as new supply continues to be delivered, but showed some of the highest transaction activity, the report added.For all the latest business 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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