Dubai: Dubai’s property rental and sales prices recorded strong growth in the second quarter of this year. It marks the fourth consecutive quarter of rents and sales growth, especially in the residential sector.
According to a recent report by Asteco, apartment sales were up 12 per cent on average in the three months that ended in June, while year-on-year growth stood at 38 per cent.
Villa sales grew by 8 per cent on average, while growth over the last 12 months stood at around 24 per cent.
“H2 2013 has not witnessed any slowdown in transaction volumes, leasing or sales growth, while new project launches have become a weekly occurrence,” said John Stevens, managing director of Asteco Property Management.
Meanwhile, rental rates of apartments and villas were up seven per cent and six per cent compared to quarter one of the same year, while climbing 20 per cent and 17 per cent over the last 12 months.
The areas that exhibited growth in apartment sales include Discovery Gardens, which was up 17 per cent in the second quarter to reach Dh7,550 per square metre, and the Greens, which rose by 15 per cent to stand at Dh12,400 per square metre.
Most expensive area
Also, Downtown Dubai grew by 18 per cent. It remains the most expensive area to buy an apartment, with Dh17,750 per square metre.
Meanwhile, villa sales grew most in Jumeirah Village, which grew by 25 per cent to reach Dh8,100 per square metre, the Springs, up 11 per cent to stand at Dh10,750 per square metre, and Arabian Ranches, which grew by 10 per cent.
“Sales prices should continue to rise as market confidence picks up in parallel with the improving economy, particularly for villas, from aspiring owner-occupiers who want to jump on to the property ladder,” Stevens said.
The best performing areas for apartment rents in the second quarter were International City, where the annual rental rate for a two bedroom unit was up 11 per cent, and Dubai Marina, which grew by 8 per cent. A two-bedroom room apartment in Dubai Marina leases for Dh110,000 per year on average.
As for villa rents, the Springs and Meadows were the best performers in the second quarter, with a 10 per cent and eight per cent growth rate.
A three-bedroom villa in the Springs now leases for Dh160,00 per year. The same unit type leases for Dh240,000 in the Meadows.
The average year-on-year rental increases stood at 35 per cent and 17 per cent for the Springs and the Meadows respectively.
Moving to another emirate
“As rental demand increases and rates rise, some residents will be priced out of established communities into less developed, more affordable areas. Some may even decide to relocate to more budget-friendly neighbouring emirates,” said Stevens.
The commercial market saw continued growth in the second quarter.
Rental rates in Jumeirah Lakes Towers (JLT) recorded a 75 per cent increase to Dh1,125 per square metre, which represents a 110 per cent year-on-year increase.
Rent in Dubai Investment Park rose 33 per cent to Dh650 per square metre in the second quarter, a 50 per cent year-on-year increase. Business Bay rose 27 per cent, a 36 per cent annual increase, with Dh1,025 per square metre.
Additionally, office sales prices in the second quarter grew by 17 per cent in JLT and by 11 per cent in Dubai Silicon Oasis compared to the first quarter of this year.
The majority of buyers in the second quarter came from the sub-continent and areas affected by social unrest in the region, according to the report.
Mortgage availability and rising market confidence boosted sales growth, it showed.
For information on the real estate sector within the UAE, please visit our sister site, getthat.com.