Dubai apartments selling for 20% more

Sales prices of apartments in Dubai rose 20 per cent as rentals registered a marginal jump of four per cent in the third quarter of 2008 compared to the previous quarter, according to a report. Unit prices in Discovery Gardens registered a growth of 39 per cent, while International City rose 31 per cent due to limited new supply and good development progress being made. Both developments benefited from considerably low launch prices, which made the units affordable and attractive to investors and owner-occupiers, Asteco, a Dubai-based property management company, said in a third-quarter report on Dubai property market. Apartment prices in Business Bay and Dubailand increased by 29 per cent with Uptown MotorCity nearing completion in the latter master development. Speaking to Emirates Business, Asteco Managing Director Andrew Chambers said there is still demand for residential properties in Dubai but investors are taking a more cautious approach. “The supply and demand gap still exits in the emirate, however, buyers are taking their own time in making decisions,” he said. Meanwhile, overall apartment rental rates rose by four per cent compared to the last quarter. International City and Jumeirah Lake Towers recorded increases of 13 and 11 per cent respectively, due to their affordability level. “Generally, rental rates are stabilising as more supply enters the market, especially at the high-end sector. However, there is still room for growth in the low- to medium-segment because of high demand, little availability and limited supply in the short-medium term,” the report said. Sale prices of villas also rose by 24 per cent over the last quarter. Although the demand-supply gap narrowed over the last couple of years, Asteco said there was high preference for villas and townhouses. Villa prices in Downtown Burj Dubai registered an increase of 61 per cent. Prices in The Palm Jumeirah, The Palm Jebel Ali and Emirates Hills jumped 42, 39 and 35 per cent respectively, as they attracted interest high net-worth individuals who are immune to the current global financial situation. The Meadows witnessed an increase of 38 per cent as a result of little movement of tenants, no additional supply and villas being traded as a finished product, consequently commanding a higher premium. However, villa rental rates continued to rise but at a slower rate of 11 per cent, compared to the previous quarter. The villa rental market has begun to stabilise as more people opt to buy villas or townhouses due to high rents. Additional units are being handed over in The Palm Jumeirah, Al Barsha and Arabian Ranches. The highest increase was reported in Downtown Burj Dubai with 25 per cent. This is attributed to limited supply of villas in the area. Office rental rates increase Office rental rates rose 10 per cent quarter-on-quarter as Deira reported a 40-per cent growth due to its proximity to the Dubai metro, high demand from banks and little availability. Several banks, which have recently rented office space in Deira, are confident the area will continue to boom due to RTA’s plans to provide better connectivity for future metro users, consequently solving traffic congestion and parking issues, Asteco said. Rents in Dubai Investment Park, a development predominantly attracting back office operations, have increased by 11 per cent due to recent handovers of office space and comparatively affordable rates. While there is still a shortage of office space, rents are expected to reach equilibrium by 2009/2010 as more supply enters the market. Sales prices in office market rose 17 per cent over the previous quarter due to several projects nearing completion or in the process of being handed over. Dubai Silicon Oasis and Downtown Jebel Ali lead with a 33-per cent growth over the last three months. In general, office sales prices in Dubai range from Dh1,100 to Dh8,000 per sqft and average at Dh2,500. Parag Deulgaonkar