The Dubai housing market is showing strong signs of improvement as sales inched up again.
Home sales were up from 1,578 in the second quarter of 2012 to 2,876 in the third quarter – an improvement of 82% on the same period 12 months ago.
Nearly two-thirds of the sales were in established residential areas like Palm Jumeirah, Downtown Dubai, Dubai Marina, Jumeirah Lakes Towers and Arabian Ranches, commented a report from the United Arab Emirates office of global property consultants CBRE.
These sales were bolstered by off-plan developments coming to the market , which the firm explains have ‘healthy absorption rates despite needing low deposits’.
“Figures compiled by the Dubai Land Department for the year so far values housing transactions at £1.77 billion – up 49% on the same quarter in 2011” says Property International http://www.propertyinternational.com/
“Although the housing market is usually relatively subdued through the summer and Ramadan, this year, the residential market was active, with apartment and villa lease rates increasing by around 6% and 4% respectively, and even higher growth rates in some better quality and more established communities,” said CBRE.
Villa rents have also risen in response to a steep demand. Quarter-on-quarter growth was around 4% while the annual rise is nearly 8%. Two-bedroom villas saw an 11% year-on-year rent increase.
“The Dubai residential market is likely to stay fragmented during the last quarter of 2012 and in to 2013, with growth dependent on location and type property. Generally, rental rates appear to be rising in most neighbourhoods, although for many districts and secondary locations, increases remain modest,” said the CBRE spokesman.
Abu Dhabi rent cap
The firm also warned that a recent order by the Abu Dhabi government requiring all public sector employees to live in the emirate may have a cooling effect on Dubai house prices and rents.
Many workers in Abu Dhabi prefer to commute from nearby by Dubai, as the city has more shopping, sports and entertainment amenities and is only a two-hour drive from Abu Dhabi.
Workers have a 12 month grace period to move so they can arrange their domestic affairs.
Meanwhile, a rent cap on homes in Abu Dhabi, has been confirmed.
The government has set the increase at 5% until November 9, 2013.
“The resolution also enables landlords and tenants to know the amount of any increase in advance, thereby protecting tenants against any sudden rise in rents,” said a government spokesman.