Dubai house prices climb 18% in Q1, says JLL
Apartment values still 22% below 2008 peak, villa prices 8% lower
Dubai property sales prices are about 18% higher in the first quarter of 2013 compared to the year earlier period, Jones Lang LaSalle said on Sunday.
Its Q1 2013 Market Overview Report for Dubai said apartment prices were up 18% and villa prices by 17%, according to the REIDIN general Residential Sale Index.
Both still remain below their peak values in Q3 2008 with villas 8% less and the apartment index 22% lower, the report said.
The rental market maintained its positive trend in Q1 with the REIDIN Rental Indices recording an improvement of 10% year-on-year.
While the villa rental index achieved its peak value in February 2013, the apartment rental index remains 26% lower than in January 2009, the report added.
Jones Lang LaSalle said rentals have increased in the most sought-after areas such as Burj Downtown, Dubai Marina and Palm Jumeirah, while remaining stable in secondary and less completed locations.
"While well established residential communities in Central Dubai are expected to see further price and rental growth over the rest of 2013, less completed projects in more remote areas will need more time before seeing increased demand and performance," said the report.
As of Q1 2013, the total residential stock in areas monitored by JLL stood at around 357,000 units.
Around 2,200 residential units, mostly apartments, have been handed over in Q1, it said.
A total of 28,000 dwellings are expected to be completed in 2013, the report said, adding that around 40,000 residential units are scheduled to enter the market over the next two years, which will represent a 11 percent increase on the current stock.
"While demand has started to pick up and a number of previously stalled projects are now resuming, we do not expect all the announced space to be delivered within this timeframe," the report said.
Alan Robertson, CEO of Jones Lang LaSalle, Middle East & North Africa, said: “For some months now, we have seen sustained confidence in the Dubai real estate market, although it remains selective with the best performance focused on high quality assets in prime locations.”
He added: “An initial glance might suggest that many of the conditions that led to the unsustainable growth in real estate prices in Dubai in 2006 and 2007 have returned.
"However, there are important differences as the Dubai market has matured. The excesses of the last speculative boom will hopefully be replaced by a period of slower but more sustained growth in demand and prices.
"The challenge is to ensure that this confidence does not lead to undue exuberance. If the market has learnt anything from the past decade, it is that an extended period of sustained growth is far more beneficial than a short period of unsustainable growth followed by an inevitable crash.”