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There’s been stability in Dubai property market with a continued focus towards the affordable segment, in contrast to the high-end market which experienced declines of up to 10%, according to a report by Asteco.
Affordable apartment units at IMPZ, Discovery Gardens and Dubai Silicon Oasis showed 3%, 6% and 2% sales growth over the summer months, whereas Dubai Marina and Jumeirah Beach Residences recorded a decline of close to 10% whilst the Palm Jumeirah recording year-on-year reductions of 13%.
“Newly launched properties with reasonable price and/or payment plans, and healthy prospective ROI, have been attracting solid investment interest, which will define market movement in the months to come as affordability remains a major driver for sales,” said John Stevens, Managing Director, Asteco.
“The second half of the year will see around 7,000 units come online, and while average rental rates have been relatively stable over the last few months, albeit with significant differences between areas, we expect the new stock to exert further downwards pressure in the next few months; and through to 2016 with 13,000 more apartments due for completion,” he added.
Abu Dhabi’s residential market saw a general slowdown in transaction activity over the extended summer period, bar increased demand at Khalifa City, for villas in particular, but rental and sales rates remained stable. However, overall, the market is continuing its positive growth trend of the last 48 months.
With new supply levels limited, Asteco expects rental rates to hold steady. “Annual rental rates for apartments and villas have increased by an average of 18% and 9%, respectively, over the last three years, with the growing confidence and improved sentiment in the Abu Dhabi market over the last two years boosting investor ROI; however, the decline in oil prices has prompted a general slowdown in investment this year,” added Stevens.
Apartments at Al Raha Beach and on Saadiyat Island recorded the highest yearly sales price increase with Al Bandar and Al Muneera up by 12% and 9% respectively. Several new apartment developments were launched in the first half of 2015, on Reem, Yas and Saadiyat Islands, with some, such as Aldar’s Meera at Shams Abu Dhabi offering very competitive rates.