Dubai: Early signs of recovery are being seen in certain areas of Dubai as rent and prices stabilise.
Downtown Burj Dubai, Dubai Marina, and Emirates Living are the areas starting to see recovery due to their being of higher quality and located in a completed community project, attractive to people commuting to Abu Dhabi.
"Those working in Abu Dhabi are increasingly exploring residential units in New Dubai due to its proximity to the UAE capital.
"While tenants are seeking units in community developments, the demand has mostly been for one and two-bedroom apartments and for three and four-bedroom townhouses," said Andrew Chambers, managing director of Asteco.
Established communities such as Jumeirah Beach Residences, Downtown Burj Dubai, and the Springs have seen the most inquiries from tenants, and so have been less affected by the decline in rent.
Rent and house prices in Dubai have eased significantly over the last quarter, according to latest industry reports.
Apartment and villa prices across Dubai eased by an average of 15 per cent and 13 per cent respectively. Apartment prices dropped from around Dh1,000 per square foot to Dh900 per square foot, while villa prices declined from Dh1,130 per square foot to Dh980 per square foot.
As property prices begin to stabilise and financing restrictions relax, Palm Jumeirah reported a surge in sales prices for villas and apartments by 20 per cent and seven per cent in the second quarter, according to an Asteco report.
"The current oversupply situation coupled with weak demand on both a local and international front will mean landlords will be fighting extra hard to secure tenancies, adding further downward pressure to rent," said Matthew Green, head of research and consultancy in UAE, CB Richard Ellis.
Four-bedroom garden homes on the Palm were selling for as little as Dh6.5 million, down from peaks of Dh14 million in September 2008, agents said in the first quarter.
In the second quarter of 2009, the average rent for studios eased from Dh61,500 to Dh45,000, one-bedrooms from Dh93,000 to Dh78,000, two-bedroom apartments fell from Dh132,000 to Dh107,000, and three-bedroom apartments dropped from Dh185,000 to Dh149,500.
The average rent for villas was Dh119,000 for two-bedrooms, Dh176,500 for three-bedrooms, Dh233,750 for four bedrooms and Dh277,000 for five bedrooms.