By Courtney Trenwith
Latest Dubizzle figures reveal three-bed apartment prices up by as much as 11%
The cost of buying property on The Palm Jumeirah in Dubai skyrocketed again during the second quarter of 2013, new statistics show.
The average sale price in the iconic development rose by as much as 11 percent for three-bed apartments (AED3.9m) and five-bed villas (AED20m) during April-June, according to an analysis by property website dubizzle.
One-bed apartments (AED2.15m) also shot up 8 percent, while two-bed apartments (AED3m) rose 5 percent and four-bed villas (AED12m) were up 4 percent.
Average rents, however, remained unchanged for smaller apartments and rose only marginally for three- and five-bedroom properties and plummeted 9 percent for four-bedders.
Dubai Marina (up 7-8 percent to AED1.3m to AED2.05m) and Jumeirah Park (up 5-8 percent to AED5.2m to AED5.8m) also recorded solid growth in sale prices during the quarter.
Meanwhile, Jumeirah Lakes Towers lost some of its appeal after an exceptional first quarter, when sale prices for one-bed apartments soared 10 percent to AED880,000 and two-beds rose 7 percent to AED1.5m.
During subsequent months, prices fell back by 3 percent for two-bedrooms and 5 percent for three-bedrooms, although one-bedders gained another 2 percent.
In the rental market, Dubai Marina recovered some of its appeal, with increases between 3-6 percent to between AED85,000 per year (one bed) and AED250,000 (three bed).
Arabian Business reported in April the area was losing some of its shine, with various analysts recording declines or no growth in the historically popular area, while the rest of the emirate managed to continue the upward pressure on rents.
In Downtown Dubai, rents declined 5 percent for one-bedroom apartments but rose 7 percent for two bedrooms and 2 percent for three bedrooms.
Rents fell 2 percent in Jumeirah Islands and among four-bedroom properties in Jumeirah Park (five bedrooms rose 4 percent).
In International City, the average sale price rose 3 percent to AED375,000 (all are one bed apartments) while rents fell by the same proportion.
dubizzle spokesperson Ann Boothello said the price increases were expected.
Investor confidence was rising as more developments were announced.
“Established communities like JBR & Dubai Marina attracted attention from investors with the announcement of the Bluewaters Island by Meraas Holding in February ... driving values up for properties in nearby communities,” Boothello said.
“Similarly, with news that the Nakheel Mall project will be completed by 2016 on the Palm Jumeirah, investors see these announcements as long-term benefits in putting their capital in these self-contained communities.
“Emaar Properties [also has] launched several developments over the past six months which have been received with open arms by investors. All of which have caused an uptrend in pricing."
Those who watch the fundamentals of real estate market will be cautious with variables such as ownership rights for expats, ROI, most important renewable visas for investors. Once burnt twice shy.
Other issues for investors to consider before buying are the strata law issues, does the building have a slush fund built up or has all the other home owners not paid their maintenance for 3 years (and maybe this is why the apartment "seems" cheap). Has the buildings machinery been maintained? Because if there is no slush fund and the AC has not been maintained then you will have to pay for this on top of your maintenance fee...its a mine field and it has not really started yet...