Dubai property prices continue to rise in Q2
Dubai, July 7, 2013
Property rental and sales prices in Dubai continued on their upward trend during the second quarter (Q2) of 2013, with year-on-year apartment rents and sales prices up 20 per cent and 38 per cent respectively, a report said.
Apartment sales prices grew on average by 12 per cent in the three months to the end of June 2013, added the Dubai property report for the second half (H1) of 2013 by Asteco, a leading real estate services firm.
In comparison, although average villa sales prices climbed a respectable 8 per cent in Q2 2013, growth over the past 12 months averaged 24 per cent.
The performance of rental rates was equally impressive, average apartment and villa rents grew by 7 per cent and 6 per cent compared to Q1 2013 and managed to climb 20 per cent and 17 per cent respectively over the past 12 months.
“The second half of 2013 has not witnessed any slowdown in transaction volumes, leasing or sales growth, while new project launches have become a weekly occurrence,” said John Stevens, managing director, Asteco Property Management.
A significant number of buyers in Q2 2013 came from the sub-continent and areas affected by regional turmoil, with investors outweighing end users. Also, improved mortgage availability and increased market confidence stimulated sales growth, said the report.
In terms of apartment sales the top performer in Q2 2013 was Discovery Gardens which increased by 17 per cent to Dh7,550 ($2,109) per sq m, taking its performance over the last year to 75 per cent.
The Greens recorded 15 per cent sales growth in Q2 reaching Dh12,400 per sq m, taking its annual increase to 44 per cent. Downtown Dubai, which witnessed an increase of 18 per cent in Q2 (38 per cent year-on-year) remains the most expensive area in Dubai to buy an apartment at 17,750 per sq m.
The best performing areas for villa sales in Q2 2013 were Jumeirah Village which rose 25 per cent in Q2 to reach Dh8,100 per square metre, a 40 per cent increase over the past 12 months.
The Springs also recorded 11 per cent growth in Q2 reaching Dh10,750 per square metre, a 25 per cent annual growth rate and Arabian Ranches returned equally impressive increases of 10 per cent in Q2, 19 per cent year-on-year with properties now selling at Dh11,850 per sq m.
“Sales prices should continue to rise as market confidence picks-up in parallel with the improving economy, particularly for villas from aspiring owner-occupiers, that want to jump on to the property ladder,” said Stevens.
Apartment rental rates grew most during Q2 2013 in International City where the annual rental rate for a two-bedroom unit increased by 11 per cent to Dh 42,500 a 27 per cent year-on-year increase. Dubai Marina recorded an 8 per cent growth (20 per cent year-on-year) where a two-bedroom apartment now leases for Dh110,000 per year on average.
The Springs and the Meadows were the top performers for villa rental rates in Q2 2013, recording 10 per cent and 8 per cent increases respectively over the last three months. A three-bedroom villa in The Springs now leases for Dh160,00 per annum, and the same unit type leases for Dh240,000 in the Meadows. Average year-on-year rental increases stood at 35 per cent and 17 per cent respectively.
“As rental demand increases and rates rise, some residents will be priced out of established communities into less developed, more affordable areas. Some may even decide to relocate to more budget-friendly neighbouring emirates,” said Stevens.
After showing some signs of confidence in Q1, the commercial market saw continued growth in Q2 2013. Rental rates in Jumeirah Lake Towers (JLT) grew exponentially, recording a 75 per cent increase to Dh1,125 per sq m, which represents a 110 per cent year-on-year increase.
Dubai Investments Park rose 33 per cent to Dh 650 per sq m, a 50 per cent year-on-year increase. Business Bay rose 27 per cent in Q2, a 36 per cent annual increase at Dh1,025 per sq m.
Office sales prices in the second half of 2013 grew most notably in JLT (17 per cent) and Dubai Silicon Oasis (11 per cent) compared to Q1 2013. – TradeArabia News Service