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Rapid growth in real estate
Abdul Basit / 10 December 2012
Dubaiís property market is showing signs of significant improvement as residential rents and apartment prices jumped by double-digits in 2012 compared to last year, according to a latest report by an international property consultancy firm.
The higher growth in rentals is attributed to the sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations.
Towers are seen next to a Dubai Metro station on Shaikh Zayed Road. Lease rates in Dubai’s popular locations increased by an average of 24 per cent year-on-year. — Reuters
Rising rents and housing prices also increased investors’ interest in property shares that lifted stock prices of real estate giants at both the bourses in the UAE.
Aldar, Arabtec, Emaar Properties, Sorouh Real Estate and Union Properties all witnessed significant price improvements.
Average residential rents rose 17 per cent in Dubai and more in popular locations while average apartment price increased by 13 per cent in the emirate, according to a CBRE Group report released on Sunday.
“Investor confidence is clearly growing and that is reflected in the increasing number of transactions taking place across the emirate. However, the main focus for investors remains completed assets in established locations,” CBRE head for Middle East Matthew Green said.
Dubai’s property market is also attracting investors from the Middle East and North Africa region, as buyers are willing to pay more for well-located assets with good security of income, as compared to last year.
Jones Lang LaSalle indicated in a recent report that Dubai is perceived as the most preferred investment market in the Mena region.
CBRE said that with supply levels becoming increasingly tight in popular community areas, further product launches are anticipated during 2013.
With the launch of new mega-projects in Dubai, including the Mohammed bin Rashid City, there is a clear commitment to continued infrastructure spending in the emirate, which is in line with Dubai’s 2020 Expo bid and the 2030 Strategic Plan. This is likely to have positive knock-on effects for the real estate sector and the economy as a whole, according to CBRE.
The market recorded rising activity levels in the popular locations of Downtown Dubai, Dubai Marina, Greens, Jumeirah Beach Residence and Palm Jumeirah with lease rates in these markets increasing by an average of 24 per cent year-on-year.
“This is most apparent in established locations with well laid infrastructure and community facilities. Over the last 12 months we have also witnessed an appreciation of sale rates, which have averaged 13 per cent in these areas. Sale rates in The Greens and Downtown Dubai developments have appreciated at notably higher rates, reflecting over 20 per cent year-on-year,” Green said.
Sale rates in the locations of Arabian Ranches, Meadows, Palm Jumeirah (Garden Villas), Springs and Jumeirah Islands have increased by 16 per cent year-on-year with the highest increase of 22 per cent noticed for Garden Villas on the Palm Jumeirah followed by Springs and Meadows which have registered 20 per cent and 18 per cent growth respectively. Regarding commercial sector, the report said office space in Dubai is around 47 per cent vacant and it is expected to rise further in the next two years.
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