Property prices in Dubai’s prime locations jumped by up to 30 per cent last year on the Emirate’s sound economic fundamentals, according to a latest report by Hamptons Mena.
The driving force of demand was the overall infrastructure supporting the development as well as the availability of various lifestyle amenities. Locations close to Dubai Metro maintained their demand during the year, for both sales and leasing, recording gains in capital and rental values.
The property services company’s Mena 2012 property report records that on average property prices increased by 20 to 30 per cent across the market, while well-established neighborhoods such as Downtown Dubai and The Palm Jumeirah witnessed an upward trend in price to the range of 30 per cent.
The most significant price increase was noted for villas, such as in Arabian Ranches, the masterplanned community by Emaar Properties, which led the growth in values during the year. High-end apartments in Downtown Dubai and Emirates Living also reported price appreciation, highlighting the growing investor confidence led by a buoyant market.
“The strong performance of the residential property market in 2012 is a reflection on Dubai’s sound economic fundamentals. Led by the robust performance of its traditional growth sectors including retail, tourism, aviation, hospitality and trade, Dubai has established its position as the region’s business and tourism hub. This had a positive impact on the property sector too, with the established communities in Dubai witnessing price increases of up to 30 per cent,” said Niraj Masand, head of Operations of Hamptons Mena. “With several new projects being launched including Mohammed Bin Rashid City, the largest of its kind development in the region, and several developments announced by leading developers, Dubai’s property sector is poised for stronger growth in 2013. In this, established communities with a wide range of lifestyle amenities will continue to take the lead position. The current market environment, with Dubai’s status as a safe haven, is ideal for investing in property — both residential and commercial.”
Hamptons reported strong customer interest both in buying and leasing activity in the established neighborhoods in Dubai during 2012. Investors, buy-to-let customers and owner occupiers recorded positive interest with the total value of transactions facilitated by Hamptons Mena during 2012 recording an increase of over 16 per cent compared to 2011.
The most significant demand came from Downtown Dubai and Dubai Marina with more than 7,500 sales and leasing enquiries in 2012.
The other neighborhoods which recorded solid investor response include: Emirates Living, Arabian Ranches, Jumeirah Lakes Towers and The Palm Jumeirah.
The average size of properties bought was 1,320 square feet compared with 1,722 sq ft in 2011, indicating more number of small-size families showing their interest in property investment.
Recreational facilities have also become much sought after with developments featuring amenities such as swimming pools, access to park or beach and health & fitness facilities recording good investor response.
The robust outlook of the property market is further highlighted by several projects especially in Dubailand, Jumeirah Lake Towers and Business Bay being resumed, according to the Hamptons report. Tanmia, the Dubai Land Department’s initiative, has helped restart a number of previously stalled projects in Dubai.