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Dubai's real estate market appears to be stabilizing with the cost of renting and buying apartments registering zero increases in the last part of 2014, a new report suggests.
Property analysts expect the market to remain subdued in the next 12 months, as more residential units are scheduled to open their doors to new tenants.
The latest report by Jones Lang Lasalle (JLL), which uses data collated by REIDIN.com, stated that the average rents and property sale prices remained ''relatively flat'' in the second half of 2014. There were also ''marginal declines'' in rates over the last quarter.
''On an annual basis, the REIDIN rental index shows growth levels dropping from 18 per cent in 2013 to 15 per cent in 2014,'' the report said.
Overall, average apartment rents went up by 18 per cent during the whole of last year, while villas registered a 5 per cent increase.
With Dubai's economy forecast to grow further and more jobs will be created this year, JLL expects the demand for affordable housing to increase over the next 12 months. ''This comes as a proposal to ensure the availability of affordable housing for the middle-income segment of the market is currently under review. These efforts aim to create a balance between the supply of luxury and affordable housing units that cater to all residents in the emirate, as many were previously priced out of the market during the 2013/2014 price rally.''
John Stevens, managing director of Asteco, earlier observed that Dubai's rents and sales prices dropped for the first time in recent months since 2012.
''Dubai's real estate sector has witnessed further stabilization and a slowing down of rental rates... We have seen both residential rental rates and sales prices decline as a result of a natural adjustment to ongoing new supply entering the market,'' Stevens told Gulf News.
Around 25,000 new residential units are expected to enter the market this year and this will likely dampen any price movements. ''The residential sector is likely to remain subdued over the next 12 months as the market is expected to absorb 25,000 additional units in 2015. In reality, we remain cautious of the delivery of some of these projects within the timeframe,'' JLL said.
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Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com