A luxury villa on Dubai’s Palm Jumeirah sold for nearly AED28m
($7.6m) at auction, developer Nakheel has said, bucking a trend that saw
property prices on the island decline to as little as AED650 per sq ft in July.
The six-bedroom Signature villa, located on a 13,000 sq ft
plot, attracted an opening bid of AED22m at a private auction, the developer said
in an emailed statement.
“The highest bid fetched nearly AED28m,” Nakheel said,
without specifying the sale price.
Research by Arabian Business last month revealed asking
prices for apartments on the offshore island had fallen nearly 70 percent from
their 2008 peak, to AED650 per sq ft.
The lowest-priced apartment, occupying 2,620 sq ft, was for
sale at a price of AED1.7m.
House prices in Dubai, the Gulf’s worst-performing market in
the last three years, have fallen more than 60 percent from their peak since
the collapse of the city’s real estate bubble in 2008.
A Reuters poll in June showed analysts believe prices could
plummet a further 10 percent as the market is squeezed by nearly a third too
much supply.
The UAE government said in June it would offer three-year
visas to owners of properties worth AED1m or more, replacing visas that require
renewal every six months, in a bid to spur interest among foreign buyers.
However, analysts said the move is unlikely to swing sales
in the emirate’s unstable property market, as investors remain wary of further
price declines.
“I can’t see property prices escalating just so that people
can get a residence visa,” said John Davies, CEO of Colliers International,
Middle East.
Deutsche Bank said in a May note to investors that political
instability in the Middle East had failed to give Dubai’s property market an
expected boost.
Home values declined 1.2 percent in May compared with the
previous month and rents fell by 1 percent, analysts Nabil Ahmed and Athmane
Benzerroug said.
Apartment prices slid 1.3 percent in May, while villas
declined 1 percent.
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