By Andy Sambidge
New report says prices, rents set to decline apart from in prime locations in Dubai
House prices and rents in the UAE are forecast to remain under pressure from new supply coming to market and the impact of distressed assets in the eurozone, a new report has said.
Property advisor Tasweek said apart from some select locations in Dubai, the UAE's real estate sector is likely to see price falls for the remainder of 2012.
Tasweek said Abu Dhabi house prices and rents are forecast to drop by between two and 10 percent.
"The real estate sector [in Abu Dhabi] is expected to continue moving further in favour of tenants and occupiers after the delivery of an additional 2,900 residential units in Q2. Total stocks are currently at around 199,800 units," Tasweek said in the report.
Masood Al Awar, CEO of Tasweek, said that the expected shift in demand to distressed Eurozone countries could further impact the UAE market.
Al Awar said that more real estate investors from the region are eyeing European bargains in light of the continent's economic pressures.
The Tasweek report added that in Dubai, signs had been seen of a price recovery in select prime locations.
However it noted: "Dubai also may feel the same price squeeze as Abu Dhabi in face of the stream of new supply. Non-prime and less popular areas in the emirate have been sustaining between 2-5 percent price drop since the second quarter of this year."
It said Dubai International Financial Centre (DIFC) currently commands the highest average annual rents in the emirate, according to a new report by property advisor Tasweek
It said rents start at AED75,000 for a studio, going up to AED230,000 for three-bedroom units.
The report said Downtown Dubai rental values also performed strongly while bargains can be had at International City, where average annual payments start at AED21,500 for a studio.
Dubai Silicon Oasis also offered some of the cheapest rates of AED24,000 for a studio, the Tasweek report added.
DIFC also led the local market in terms of average commercial rent and buy rates, with commercial space fetching AED 16,799 per sq m on the sales side and AED1,605 per sq m on rental basis, the report said.
The report said: "With the exception of a slight rally observed in some of Dubai's prime locations, real estate recovery is pressurising property prices in general continue to fluctuate in Abu Dhabi and Dubai as more units continue to be added to the existing market inventories."
Tasweek, a provider of real estate development solutions for the UAE and the Middle East, manages properties for over 25,000 customers in the region.
I am a real estate agent in Dubai and I have seen property prices rise by 20% to 30% in almoist ALL areas of Dubai over past 6 months. This report cannot be correct.
I agree with Craig. This report can't be right. go on to the online portals such as dub, pf and jr, you could see that rents are going up again.
I am also an agent and there is no way the prices have increased by 20% - 30% in the last 6 months across the board. With the Palm as a prime example prices have increased by roughly 8% - 10% in the last 6 months. This is based on actual selling prices and not advertised prices which as you should know makes a big difference.
I also dont agree as rent went up between 3500 and 4000AED a year for 1 and 2 bedrooms in Intenational City.
@ Craig, Joseph, Richard, Jacques, what plannet are you guys on? You certainly can't be living in dxb. oversupply and a lack of appetite is killing prices. I know you guys are in real estate and that you want to protect your businesses but you have to realistic at the same time....
oh dear, this is worrying.
Real Estate Agents are trying to push prices up again with sales blurb on articles they dont like.
Back to the future?
Yes, agents are nobles. Ghusais, JBR and Skycourt rents are doubled!!!!
Come on guys, Reality.... In few locations, landlords are ready to take 12 cheques not to keep it empty. In neighbourhood, they are hesitating to vacate the tenant even for defaulting 6 month rent.
I am sorry guys - wake up and smell the coffe. Prices ARE going up and HAVE gone up in Dubai.
Dubai Villa Increased by over 30% this year
Springs 2-Bed Villas: AED 1m to AED 1.5m
JVT Townhouse Villas: AED 1.1m to AED 1.6m
Jumeirah Village 2-Bed Detached Villas: AED 1.4m to AED 2.1m
Meadows 3-bed villas: AED 2.7m to AED 3.5m
Arabian Ranches 4 â€“bed villas: AED 3.4m to AED 4.1m
Green Community 5-bed Family Villas AED 2.8m to AED 3.6m
Apartments increased by over 25%
International City Studios: AED 140K to AED 200K
International City 1-Beds: AED 220K to AED 280K
Dubai Marina: 2-Bed: AED 900,000 to AED 1.2m
Palm Jumeirah: 2-Bed; AED 1.2m to AED 1.5m
Business Bay: 1-Bed: AED 600K to AED 800K
Discovery Gardens 1-Bed: AED 360K to AED 450K
Discovery Gardens Studio: AED 240K to AED 300K
Prices fell sharply from end of 2008 and were relatively static in 2010 and 2011. However, they are certianly rising in 2012 and those people who claim this is not the case have not looked. I have checked every area and compared current price of properties we are selling at with what we were selling them for at beginning of this year.
There is NO DOUBT prices have gone up by around 30%.
Rents are also following. Rent renewals over past month have been around 20% higher than they were last year.
This is FACT and can be checked by looking prvious editions of Gulf News Property Supplements - we have copies of all of these for past 5 years in our office. So if you do not know then do not comment that prices are not rising
This article is rubbish and not related to real life events. I was looking to buy a 1-bed in Discovery Gardens for AED 380,000 in January. I viewed the property and made an offer for AED 360,000. I should have bought it then. Now I cannot find one less than AED 440,000 and I have searched this properly.
I have looked at other areas and prices have definately gone up by about 30%. People who are saying they have not are not up-to-date with the facts.