Prime residential properties continued to perform better compared to average overall rental increases of two per cent for apartments and three per cent for villas, the report said.
“The increasing rental rates are due to the lack of a certain unit type, whether that is larger three-bedroom units in towers or smaller townhouses in villa communities,” Asteco chief executive officer Elaine Jones said.
“The reason for the shortage of a particular unit type is either the low number of units initially available or high occupancy rates within certain developments,” she added.Apartments on Sheikh Zayed Road and Downtown Dubai showed the greatest rental increases, with a two-bedroom apartment annual leasing rates up six per cent at Dh105,000 and up four per cent at Dh120,000 respectively.
Leasing rates for villas followed a similar steady trend, with the Palm Jumeirah leading the way with a seven per cent increase. A three-bedroom house now rents for Dh325,000 per annum on average.
The Springs and the Arabian Ranches were next in line with increases of 5 per cent and 4 per cent respectively. Three-bedroom villas were leasing for Dh125,000 per annum in the Springs while similar properties in the Arabian Ranches were leasing for Dh145,000 per annum. The report revealed that residential sales prices were relatively unchanged, even though increasing numbers of units were advertised at inflated prices, while the commercial property market remained subdued due to a lack of demand.
The property management company also witnessed increased rates in some of the emerging communities such as Jumeirah Village, which can in part be put down to the increased demand as infrastructure, landscaping and the retail offering improve.“It is also true that increasing rents in more established developments and the consequent outflow of residents unwilling or unable to pay the hiked rate, are adding upwards pressure to the rental rates,” Jones said. Overall sales prices in the third quarter of 2012 remained stable after the steady increases, which were recorded at the beginning of the year. The summer coinciding with Ramadan resulted in lower enquiry levels and consequently no significant pickup.
Apartment sales were relatively unchanged since the second quarter of 2012 — the only movement was seen in the Greens, which recorded a 3 per cent increase, edging up to Dh8,800 per square metre. There was also little movement with villa sales, which were flat across the board. Once again the Palm Jumeirah is still the most sought after with villas changing hands for Dh17,200 per square metre, compared with Dh5,400 per square metre in Jumeirah Village. The commercial market has also been rather passive since the beginning of June, which was reflected in the office sales and rental rates, which remained unchanged.
“One trend we have noticed is that tenants and or buyers of office space are demanding significant discounts and incentives before committing. This is likely to continue as more supply enters the market,” Jones said.
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