More than 50 projects were launched in the off-plan market across Dubai, UAE, during 2014, which are expected to deliver over 13,000 units to the market, according to a report.

The last quarter of 2014 saw new inventory being released on the back of positive sentiment from Dubai Cityscape show. Major private developers including GiGico, Damac and Danube launched new projects backed by an aggressive marketing campaign, stated MPM Properties, the real estate consultancy arm of Abu Dhabi Islamic Bank in its quarterly report.

This resulted in high sales volumes being achieved, it said.

While 2014 was a year of further growth for Dubai real estate market, the last three months saw a decline in values/ prices in some areas and improved net yields to more sustainable levels, it added.

In the residential sector, sales values increased 15 per cent during 2014, while the fourth quarter saw quarter on quarter increase of four per cent.

On the other hand, rental values grew 10 per cent across Dubai last year, but stayed flat during the fourth quarter, stated the MPM Report, which highlights the importance of understanding micro level factors when analysing value adjustments, with the Palm Jumeriah being a prime example.  

Average transaction values on Palm Jumeriah area in Dubai declined over 2014, driven in part by a readjustment by developers on the entry level price points of new products being offered to the market.

For example, Palm Views has an entry level price of Dh1.3 million ($353,828) for a studio apartment. Similarly, Jumeirah Golf Estates saw an entry level price level of Dh3 million ($816,526) for townhouses in the launch of Redwood Park, which has impacted the overall average values for the development.

In comparison, in smaller master planned communities such as the DIFC, there was a negative impact on average selling prices as new inventory was delivered in Burj Daman, said the report.

According to MPM, the mid-tier properties such as Reemram and International City saw an increase in transactions, with rents having risen by over 10 per cent over the year.

The current pipeline of new releases for reasonably priced housing stock is focused on new growth areas such as Sports City, Jumeirah Village Circle and Al Furjan, it stated.

On the other side of the affordability spectrum, areas such as Dubai Hills, Meydan and Dubai Creek Harbor are also witnessing fresh launches of off-plan properties, the report added.

On the office market scenario, the report said Grade A units performed well last year with average rents increasing by almost 14 per cent. Also there has been a marked improvement in the level of enquiries.

The Abu Dhabi Islamic Bank unit pointed out that 700,000 sq m of new office space was due to enter the market by the end of 2015, with major new additions, including Central Park which is likely to see average rents facing downward pressure, meeting the demand for Grade A office space.

"The landlords have now become more flexible in accommodating demand from mid-level businesses with smaller requirements as opposed to retained whole floors for larger tenants. Offices located towards the Abu Dhabi end of Dubai are performing well due to close proximity to freehold residential areas, less traffic congestion and easier access to Abu Dhabi," remarked Paul Maisfield, the CEO of MPM Properties.

In the last 12 months, office prices increased by an average of 21 per cent, but the increase between the third and fourth quarter was a modest three per cent, he pointed out.

Jumeirah Lake Towers saw the biggest quarter-on-quarter jump of seven per cent, followed by DIFC at five per cent and Business Bay at four per cent, he added.-TradeArabia News Service