Dubai prime area apartment prices 'picking up'.

Byline: Dubai

There has been a slight improvement in the sale prices for completed apartments and villas across Dubai with the prime areas such as Downtown Burj Dubai area witnessing the highest quarter-on-quarter increase of eight per cent, said a report.

Asteco, a leading property services company in the UAE, in its comprehensive analysis of Dubai property market in the third quarter, said the sales apartment prices for Downtown were up from Dh1,200 ($327) per sq ft in the second quarter to Dh1,300 ($354) per sq ft.

'This was mainly thanks to the Dubai Mall, the Dubai Fountain and improved infrastructure in the area, which is overlooked by Burj Dubai, the world's tallest building nearing completion,' it said.

However, across the whole of Dubai sale prices for completed apartments and villas have increased only slightly with an average one and three per cent compared to last quarter, according to the report. Rental charges have seen minimal change compared with the same period, it added.

Asteco said Jumeirah Beach Residence had also seen a five per cent sales increase as a result of continuous opening of retail units, gyms nearing completion and strong interest in leasing from both Dubai and Abu Dhabi residents.

'Both Downtown Burj Dubai and Jumeirah Beach Residence are highly desirable, fully established communities, which are exactly what the market is seeking. A completed tower is no longer enough if it is not part of an integrated community with convenient access to schools, hospitals, transport, leisure and entertainment facilities,' said Asteco CEO Elaine Jones.

'In terms of villa communities, The Springs and Arabian Ranches are faring well for the same reasons,' she pointed out.

Asteco reports that transactions and enquiries have picked up in line with mortgage availability. Demand is predominantly for smaller units such as studios and one bedroom apartments, or two and three bedroom villas or townhouses.

"It should be noted, however, that the increased interest in completed communities has resulted in landlords inflating their prices," the report stated. "In addition, the option to lease these units is making price negotiations less flexible as the need to sell to generate income is lower," it added.

In the Dubai apartment and villa rental market, Asteco said the increased interest and rumours of economic recovery have caused some landlords to raise their rents. 'But many of these units remain empty for several months due to a significant amount of supply and increased competition,' it noted.

'Currently, average rental rates for studio apartments are Dh45,000 while one, two and three bedroom apartments command Dh76,000, Dh103,000 and Dh139,000 respectively. Rates for studios and one bedroom apartments are beginning to stabilise, whereas there is still room for further drops for larger units, said the report.

Villas and townhouses are available on average for Dh117,500 for two bedrooms, Dh180,500 for three, Dh227,500 for four and Dh278,500 for five bedroom units respectively.

Asteco said the majority of inquiries were for Jumeirah and Umm Suqeim where tenants are looking for three-bedroom units between Dh150,000 and Dh180,000.

Communities alongside Sheikh Zayed Road are the preferred choice, whereas developments around Emirates Road suffer from the location disadvantage, the report adds. "However, this is likely to change next year with the opening of Al Maktoum International Airport, the biggest airport in the world," the report stated.

Asteco also reported a noticeable increase in activity in the leasing market prompting tenants to get better value for their money, either by decreased rents, increased property size, better quality specifications, better amenities and accessibility.

"Despite the Real Estate Regulatory Agency's attempts to provide a rental index earlier this year, it is these influences which are truly driving current rental market activity," the report added.- TradeArabia News Service

Copyright 2008 www.tradearabia.com

Copyright 2009 Al Hilal Publishing & Marketing Group

Provided by Syndigate.info an Albawaba.com company