Dubai rentals up by 24%
Residential rents and property prices in Dubai’s prime locations have risen on an average of 17 and 16 per cent, respectively, in the past one year (December 2011 to November 2012), according to CB Richard Ellis (CBRE).
“Dubai is seeing higher rental growth this year due to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations,” says Matthew Green, Head of Research & Consultancy UAE, CBRE Middle East.
“This is most apparent in established locations with well-laid infrastructure and community facilities,” he added.
Although lease rates rose 17 per cent on average over the past one year, prime areas such as Downtown Dubai, Dubai Marina, Palm Jumeirah, The Greens and Jumeirah Beach Residence saw rent rising 24 per cent year-on-year.
CBRE data corroborates Emirates 24/7’s own research on rental and property prices in The Greens, which we published last month.
According to our data, rents had risen by almost 22 per cent for studio apartments, nearly 14 per cent for one-bed apartments, and 16 per cent for two-bed apartments since the beginning of 2012 until mid-November.
In November, the average rents for a studio apartment in The Greens stood at Dh55,000 per year compared with Dh45,000 per year in January 2012. One-bedroom units were available for Dh65,000 p.a. compared with Dh57,000 p.a., whilst two-bed units were going for Dh110,000 p.a. as against Dh95,000 p.a. at the beginning of the year.
The latest CBRE report adds that property prices increased by an average 13 per cent in prime locations, with the Greens and Downtown Dubai developments appreciating by over 20 per cent year-on-year.
Sale rates in Arabian Ranches, Meadows, Palm Jumeirah (Garden Villas), Springs and Jumeirah Islands rose 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 registered 20 per cent and 18 per cent growth.
Our own research report on villas sale prices in the Palm Jumeirah, published in July this year, analysed exactly the same numbers. “Prices of Signature and Garden Home villas on the Palm Jumeirah are on the rise, registering average increases of 11 to 25 per cent in first half of 2012 compared with the same period last year,” we’d written in our report.
“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’s Green says in the latest report.
Jones Lang LaSalle, in its seventh Mena Investor Sentiment survey, said investors from the Middle East and North Africa (Mena) region are keen on buying real estate in Dubai due to its international appeal, transparency and legal structure.
It further stated that Dubai was the top investment destination across the Mena region for real estate and investors’ were expecting the emirate to remain the strongest performing real estate market in the region for the next 12 months.
Cluttons also said that high net worth individuals across the Gulf Cooperation Council had shown interest to invest in Dubai's property market in 2013 and viewed the emirate has their prime investment destination.