Elaine Jones, CEO, Asteco Property Management
The Dubai property market was steady again for quality buildings in established locations for the third consecutive quarter of 2011. Sales prices and rents for villas were stable with only minor declines for apartment rents and sales prices of 1 and 4% respectively, while the office market witnessed slight declines of 3% for sales and leasing, according to the latest Q3 2011 report from leading UAE property management company, Asteco.
“In actual fact this is the third consecutive quarter that quality buildings in established locations have experienced steady sales prices and rental rates” said Elaine Jones, CEO, Asteco Property Management.
Sales prices and rental rates for villas remained constant due to a lower number of sales transactions and rental relocations over the summer months, a period when traditionally many families take annual holidays, which this year also coincided with Ramadan.
Although sales prices for apartments were stable in sought after locations such as the Palm Jumeirah, Jumeirah Beach Residence and Dubai International Financial Centre, properties in Discovery Gardens experienced a 10% drop. This was the result of individual landlords selling at reduced rates after being unable to attract tenants to cover their mortgage payments.
“Nakheel released a significant number of units at reduced rental rates in Discovery Gardens, which, coupled with the high service charges, forced some owners to sell at a reduced price,” added Jones.
Overall rentals remained relatively stable over the summer months with only the aforementioned Discovery Gardens as well as International City and Jumeirah Lakes Towers experiencing minor declines of 2% due to high volumes of supply. Quality buildings in established developments however continue to hold their value as demand both from newcomers and ‘local’ relocations has been rising.
“Whether this increased demand has any stamina will depend on micro and macro economic developments. Confidence in the Dubai property market could be severely tested if the threat of a global double-dip recession materialises, although fears of that happening have eased with a better than anticipated September US jobs report,” added Jones.
In general the office market was steady, with only Business Bay and Tecom C witnessing declines in sales and leasing rates due to subdued demand and increasing supply. Two existing trends that became even more pronounced during the third quarter were the rapidly declining demand for shell and core office space with tenants demanding fitted space and proximity to Dubai Metro stations being high on the list of tenant requirements.