Dubai: Property sales rates were at the highest levels since 2008 as the real estate market continued to recover from the global financial crisis. Villa prices have reportedly gone up 23 per cent and apartment prices gained 14 per cent year on year, according to a report by Asteco Property Management.
Rents on villas and apartments in Dubai climbed an average of 17 per cent last year as the emirate benefited from the Arab Spring and Euro crisis, with further increases expected in 2013, the report also stated. Prices, transactions, occupancy and property launches were the highest in the second half of last year while apartment and villa sales prices increased by 9 per cent in the fourth quarter alone, Asteco said.
There were more cash-based than mortgage-backed buyers in the fourth quarter of 2012. The Springs community saw the highest villa price increases, with rates jumping 38 per cent to reach Dh9,700 per square metre. This was followed by Jumeirah Islands with an increase of 28 per cent to Dh12,400 per square metre and the Arabian Ranches grew by 27 per cent to Dh10,250 per square metre. The biggest apartment selling price increases were at Palm Jumeirah, where rates increased by 27 per cent to Dh15,100 per square metre, followed by the Greens with growth of 23 per cent at Dh10,250 per square metre and Downtown Dubai which recorded an 18 per cent increase to Dh14,000 per square metre.
“The recent clarification by the UAE Central Bank that it will not impose any immediate loan-to-value (LTV) caps on UAE banks, suggests that existing LTV ratios are likely to remain unchanged, in which case Asteco forecasts that the sales market will enjoy continued growth in 2013,” said John Stevens, Managing Director of Asteco Property Management.
Residential rents also saw “robust growth” except in International City, the report said. Rents for apartments increased by seven per cent and for villas by five per cent in the fourth quarter of last year.
The highest growth rates year-on-year for villas were recorded in the Springs, where a three-bedroom unit now costs Dh140,000 per annum, a 27 per cent increase; Villas in Arabian Ranches rose 25 per cent to Dh155,000 per annum for a three-bedroom house. The most expensive area remains The Palm Jumeirah — a three-bedroom villa there costs Dh325,000 per annum.
The biggest apartment rent hikes were in Discovery Gardens, with a 23 per cent increase to Dh45,000 annually for a one-bedroom unit. “If demand continues, we expect to see a shift in the market from being predominantly tenant-led to one controlled by landlords, especially in quality, well managed and established developments,” said Stevens.