Increases in property rental and sales prices in second quarter contributed to the bullish 12 month market performance as year-on-year apartment rentals and sales prices increased 20 per cent and 38 per cent, respectively. Also, villa rental prices increased 17 per cent and sales prices were up 24 per cent, while commercial rents also increased 43 per cent, which was described as a positive outlook in the Asteco H1 2013 report.
Residential and commercial developments in Dubai have recorded another robust performance in second quarter, the fourth consecutive quarter of leasing and sales growth, particularly in the residential sector.
Apartment sales prices grew on average by 12 per cent in the three months to the end of June 2013, with year-on-year growth standing at 38 per cent. In comparison, although average villa sales prices climbed a respectable 8.0 per cent in second quarter of 2013, growth over the past 12 months averaged 24 per cent. The performance of rental rates was impressive, as average apartment and villa rents grew by 7.0 per cent and 6.0 per cent compared to first quarter 2013 and managed to climb 20 per cent and 17 per cent, respectively, over the past 12 months.
"Second half 2013 has not witnessed any slowdown in transaction volumes in leasing or sales growth, while new project launches have become a weekly occurrence," said John Stevens, Managing Director, Asteco Property Management.
A significant number of buyers in second quarter 2013 came from the sub-continent and areas affected by regional turmoil, with investors outweighing end users. Also, improved mortgage availability and increased market confidence stimulated sales growth, according to the report.
In terms of apartment sales, the top performer in second quarter 2013 was Discovery Gardens, which increased by 17 per cent to Dh7,550 per square meter, raising its performance over the last year to 75 per cent. The Greens recorded a 15 per cent sales growth in second quarter, reaching Dh12,400 per square meter, bringing its annual increase to 44 per cent. Downtown Dubai, which witnessed an increase of 18 per cent in second quarter (38 per cent year-on-year) remains the most expensive area in Dubai to purchase an apartment, at Dh17,750 per square meter.
The best performing areas for villa sales in second quarter 2013 were Jumeirah Village, which rose 25 per cent in second quarter to reach Dh8,100 per square meter, a 40 per cent increase over the past 12 months. The Springs also recorded an 11 per cent growth in second quarter, reaching Dh10,750 per square meter, which was a 25 per cent annual growth rate, and Arabian Ranches returned equally impressive increases of 10 per cent in second quarter, 19 per cent year-on-year with properties now selling at Dh11,850 per square meter.
"Sales prices should continue to rise as market confidence picks-up in parallel with the improving economy, particularly for villas from aspiring owner-occupiers who want to jump onto the property ladder," said Stevens.
Apartment rental rates grew most during second quarter 2013 in Dubai International City, where the annual rental rate for a two-bedroom unit increased by 11 per cent to Dh42,500, a 27 per cent year-on-year increase. Dubai Marina recorded an 8.0 per cent growth (20 per cent year-on-year) where a two-bedroom apartment now leases for Dh110,000 per year, on average.
Times of Oman