The property markets in Abu Dhabi and Dubai have started showing early signs of recovery as investors get more and more confident in their ventures, according to a real estate expert.

For both Abu Dhabi and Dubai, positive signs of early recovery are emerging. Property listings are drying up as owners increasingly prefer to hold their properties for the medium- to long-term, instead of discounting prices further just to attract immediate buyers, said Landmark Advisory in its 'Q209 Dubai & Abu Dhabi Real Estate Report.'

'More owners are choosing to lease their properties as a cash-generating alternative to selling,” pointed out Jesse Downs director of Research and Advisory Services, Landmark Advisory.

'The leasing market in Dubai is still strong, showing continued interest from internal relocations and excess demand from Abu Dhabi,' he noted.

'The future of sale prices and transaction volumes will depend largely on the evolution of lending policies and demographic changes over the next four months. In terms of population, additional outflows are likely to coincide with the end of the school year,” Downs added.

According to Landmark Advisory report, average prices in Dubai during the first quarter of 2009 plunged 23 per cent for apartments and 32 per cent for villas, compared to fourth quarter of 2008.

The prices for 4-bedroom villas suffered the heaviest declines, at 16 per cent, the report said.

The average leasing rates for apartments decreased 4 per cent in first quarter, with one-bedroom apartments declining the most, at 11 per cent.

Average villa rents fell by 17 per cent, but the number of villa rentals increased by 26 per cent. Overall, residents are favoring moves to higher quality developments in Dubai, it added.

Turning to Abu Dhabi, the report said the sale price declines accelerated during the first quarter, after falling by 5 to 15 per cent in the fourth quarter of 2008.

The secondary market listing prices fell 15 to 20 per cent for apartments and 25 to 30 per cent for villas. However, by the beginning of the second quarter of 2009, sale prices started to stabilize as sellers slowed the pace of price-cutting, the report added.

Abu Dhabi’s rental market has also stabilized. After sky-rocketing in 2008, some rents have begun to show signs of a marginal correction.

On average, asked rents for apartments remained stable during the first quarter, indicating the resilience of the apartment segment. Villa rents, however, decreased 10 to 15 per cent, with listed rents on 4-bedroom units falling the most, at 20 per cent.

'Abu Dhabi’s sale prices are starting to stabilize, indicating improved market confidence. The buyer-profile is changing: end-users are replacing investors as the predominant owners of freehold property,' Downs pointed out.

'The end-users are particularly interested in developments that are close to completion, like Al Reef’s Arabian district and Reem Island’s Marina Square. Investors, on the other hand, are waiting for a price floor to emerge in order to reduce risk and maximise future returns,” he added.-TradeArabia News Service