Sales, rents under pressure

Affordable communities will continue to lead the way in terms of rental demand and investor opportunity in Dubai, against a scenario of looming oversupply in the high-end and luxury segments, according to a report by Asteco. The report noted across-the-board declines in residential sales, with villa sales prices down 11 per cent and apartments 8 per cent year-on-year.

Asteco noted that end users, rather than investors, were the predominant buyers of villas and town houses, preferring smaller units rather than large villas. New communities such as Mudon and Arabian Ranches Phase 2 saw improved levels of activity as competitively priced, good-quality alternatives to more established areas.

In the high-end apartment market, Jumeirah Beach Residence (JBR) prices dropped 16 per cent to Dh1,370 per square foot and apartments on the Palm Jumeirah dropped 14 per cent to Dh1,720 on average.

Villa rents were down 9 per cent year-on-year, but Al Barsha recorded a 9.2 per cent increase to Dh213,000 for three-bedders, while similar
properties in Mirdiff rose 4.2 per cent to Dh138,000. The biggest price declines were in Jumeirah and Umm Suqeim where three-bedders dropped more than Dh50,000 or 20 per cent on average to Dh195,000. Larger fourbedroom homes in Arabian Ranches and Jumeirah Park were down 19 per cent to Dh243,000 and 15.5 per cent to Dh145,000 respectively.

Apartment rents were down by 4 per cent on average, with Shaikh Zayed Road recording the highest drop of over 12 per cent. The Dubai International Financial Centre area saw twobedders drop 8.7 per cent to Dh158,000 per annum. JBR had the highest average decline for a two-bedder at 9.2 per cent to Dh148,000.

In Abu Dhabi, Asteco expects a noticeable slowdown in the next 12 months, compounded by a reduction in government spending and stagnant salary levels. This after a slow but positive performance last year, which sawapartment rents increase by 5 per cent on average, with prime projects achieving up to 10 per cent growth and 3-4 per cent growth for apartment sales prices.

Source: Property Weekly


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