Dubai: Sale prices in a number of freehold communities across Dubai remained stable in the third quarter compared to the previous three months, according to the latest report by property management company Asteco.
The Asteco Dubai Q3 Report 2010 published yesterday says that although further price adjustments are expected in the near future, affordable apartment developments such as Discovery Gardens and Jumeirah Lake Towers (JLT) remained at Dh500 and Dh750 per square foot respectively in the third quarter.
"Asteco has recorded an average drop of 6 per cent for [apartments]. This is mainly attributed to the increasing supply of apartments. However, we have also seen increased sales activity, predominantly due to owners who are expected to take handover of their unit but are unable to make the final payment, which often constitutes a large percentage of the overall sales price," said the report.
This trend was also mirrored in Downtown Burj Dubai, which despite being at the opposite end of the price spectrum still commanded Dh1,300 per square foot.
Despite demand for townhouses and smaller villas picking up speed — a trend Asteco expects to continue in the short-to-medium term — during the third quarter it was properties in Emirates Hills, Jumeirah Islands and the Green Community that remained unchanged price-wise at Dh1,600, Dh950 and Dh700 per square foot respectively.
"There has been a change in focus in the real estate sector as maximising rental yields and long-term capital appreciation takes precedence over short-term sale profits, with pro-active property management being a key factor," said Elaine Jones, CEO of Asteco Property Management.
The rental market in Dubai has followed much the same pattern as the sales sector with price shifts favouring tenants.
Despite an overall apartment rental contraction of 6 per cent, units in JLT slid just 2 per cent with 3 per cent adjustments in Discovery Gardens and Downtown Burj Dubai.
"The number of transactions, which are generally at their lowest during the summer and Ramadan, has been surprisingly active with a number of people taking advantage of the quiet months to look for value for money accommodation. Therefore, the drop in rents has proved to be less significant than in the second quarter. Although further declines across the board cannot be ruled out, the drop in [Discovery Gardens and JLT] is expected to be less noteworthy due to the already lower rents," explained the report.
Villa rentals fared slightly better with average declines of 4 per cent from the second quarter on the back of increased stock coming on the market in out-of-town developments.