Dubai property market continues to stabilise
Slower declines across property rental and sales continue says report
For the first quarter in nearly two years there has been a virtual stabilisation with slight declines in certain areas according to the Q1 2011 report from UAE property management company, Asteco.
Apartment rentals averaged a decline of 2% over the quarter, though drops of as much as 5% and 7% were seen in selective areas. Discovery Gardens and Dubai Marina fell 6% and 4% respectively, but with high transaction activity due to their favourable locations and increased affordability.
“The rental market stabilised in certain areas, with a downward trend in others, albeit at a lower rate,” said Elaine Jones, CEO, Asteco Property Management.
“This is attributed to the pressure of new stock on the already oversupplied market, especially for apartments and offices. Internal movement is still high and is predominantly driven by a flight to quality and value for money.”
Overall, the report found these declines herald more rental declines in coming quarters, fuelled by various factors including tenants capitalising on lower prices by moving to more upscale developments.
Increased supply in both Dubai and Abu Dhabi is also having an impact on rents, seeing some tenants who had commuted to Abu Dhabi from Dubai moving to the capital.
Villa rentals fared better, showing virtually no change since last quarter. Demand in secondary locations has increased as better prices and improving infrastructure boost value for money.
The report found downward trends in villa rentals was set to continue, with more supply to be handed over in coming months.
Apartment sale prices also show continuing signs of stability, with prices having eased by 1% in the sector during the first quarter of 2011, with the decline slowing further from the 4% seen in Q4 2010. While the figure represented an overall trend, the report emphasises the depth of the Dubai market, characterised by a wide choice of high- to low-end properties in primary and secondary locations.