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Dubai Apartment, Villa Prices Stable at Year-end

DUBAI - Sales prices for apartments and villas in completed developments across Dubai in general stabilised towards the end of 2009 with no change from the third to the final quarter, according to the latest report from Asteco, the largest property services company in the United Arab Emirates.

The latter half of 2009 also saw an increase in transaction activity as the economy picked up and mortgage availability improved, says the report on the Dubai residential and commercial property market for Q4 2009 published on Wednesday.

Of all the developments monitored, Palm Jumeirah fared best as it was able to hold values, the company said. “Lifestyle communities are weathering the storm and the Palm Jumeirah is an iconic development and, with continuous improvement of infrastructure and completion of residential and hotel developments, has become a sought-after destination,” said Asteco CEO Elaine Jones.

Other areas identified by Asteco as continuing to generate interest throughout 2009 include Downtown Burj Dubai, Dubai Marina, Jumeirah Beach Residence, Springs and Arabian Ranches as they offer lifestyle communities with easy access to retail, leisure, education and entertainment.

In 2009, the average sales price in Dubai stood at Dh950 per square foot for apartments with a change of minus 16 per cent since Q1 2009, and Dh1,000 per square foot for villas with a minus 9 per cent change since Q1 2009, says the report. Business Bay and International City saw the largest decrease in apartment sales prices since Q1 2009 with 23 per cent. Green Community and Palm Jumeirah prices remained stable with no change since the beginning of the year. However, the year-on-year change from Q4 2008 was minus 46 per cent. The highest drop in prices occurred between Q4 2008 and Q1 2009.

In the villa market, Jumeirah Park experienced the highest drop in sales value since Q1 2009 with 34 per cent, followed by Arabian Ranches with 29 per cent, says the report. Palm Jumeirah and Springs, on the other hand, recorded positive growth with 20 and 21 per cent respectively. Similar to apartments, price decreases were most substantial between Q4 2008 and Q1 2009. The average year-on-year decrease amounted to 49 per cent since Q4 2008.

Dubai rental rates have declined by 24 per cent for apartments and 18 per cent for villas on average across the year of 2009, according to Asteco. Apartment rental rate decreases saw Palm Jumeirah with a minimal decline of 6 per cent, in comparison, followed by International City with -15 per cent since Q1 2009.

Villa leasing rates in Jumeirah and Umm Suqeim saw the highest drop with 30 per cent.

Palm Jumeirah was the only area that recorded an increase in villa rental rates of 4 per cent on average due to the lack of availability as many owners bought property to live in or keep as a holiday home. Compared with Q3 2009, the decline in rental rates slowed in the last quarter with overall decreases of 2 per cent for apartments and 1 per cent for villas. October saw rates pick up slightly but with the negative media attention Dubai received in November, rents fell once more.

business@khaleejtimes.com