The residential market in Dubai continues to outperform the commercial office sector with average lease rates for apartments and villas reflecting positive growth during the first half of 2012, as per CB Richard Ellis. Average apartment lease rates across residential districts registered a growth of around 2% quarter-on-quarter, although apartments remain in the negative territory on a year-on-year basis.
Lease rates in established community locations have been appreciating at notably higher levels, outperforming the wider market. Occupancy rates are also on the rise as limited new supply and the availability of facilities and amenities have made these locations highly sought after for tenants. Villa lease rates remain very strong, largely due to the limited availability of stock. Rents during the quarter increased by 2%, taking the average growth for the first half of the year to 5%.
The residential transactional market is forecast to maintain its positive footing during the remainder of the year. However, transaction volumes may be more constrained in the third quarter of the year due to the slowdown during the summer season and Ramadan wherein historically, the Middle East’s markets remain more subdued.
The MENA Weekly Monitor – Bank Audi