The rate of increase in the sales prices of homes in Dubai slowed in the first half of 2014, but continued to grow at an exceptional rate in April-June, according to figures in the latest Dubai property market report by local real estate brokerage and advisory firm Asteco.
The report said that selected apartment prices rose by 6 per cent in the second quarter of 2014. This is equivalent to an annualised rate of increase of more than 25 per cent. Villa prices rose by 3 per cent in the same period, equivalent to an annual rate of increase of 13 per cent.
According to Asteco, features of the Dubai real estate market in the first half of the year included:
The development of a two-tier market between buyers with the resources to acquire property in popular and established areas including as Downtown Dubai, Dubai Marina and Palm Jumeirah and others that focused on Jumeirah Village, Dubai Sports City and Dubai Silicon Oasis, where prices remained low in comparison. Asteco said these areas witnessed price increases of about 10 per cent in the second quarter
Modest price increases in affordable locations including Discovery Gardens and International City. Any further growth in these communities will position them outside the affordable range, and consequently lead to a reduction in buyer interest, Asteco said.
Asteco said many sellers that raised prices following the announcement that Dubai would host the World Expo 2020 have no intention of reducing their asking prices until buyers match their expectations. This has led to a reduction in transaction levels, especially for higher priced properties within established communities, Asteco said.
Asteco said it expects new project announcements this autumn that will test demand in the market
New project launches cited by Asteco
- Dubai Properties Group. Projects launched included Manazel al-Khor in Culture Village; Rahat Villas at Mudon; and 200 new units at Remraam.
- Damac. Projects launched included the NAIA hotel and hotel apartments, 34 premium Fendi villas at Akoya Drive, and two hotel apartments at Jumeirah Village, The Vantage and The Constella
- Emaar. The Opera Grand, the first residential development in the Opera District at Downtown Dubai, was launched
- Danube launched its first project in the UAE called Dreamz, which consist of 171 townhouses with 3- and 4-bedroom configurations located at Al-Furjan.
Asteco said the office sales market experienced no significant price increases in the second quarter and remained stable, with no significant growth witnessed during the second quarter.
You can find the report in full here.