Rents for apartments and villas in Dubai increased in the first quarter of 2012 with an average rise of 1% but some quality locations faring better, according to the latest report from Asteco.
Asteco said it has noticed a lower number of listings for certain unit types in established locations such as Downtown Dubai and Green Community, resulting in higher asking rents.
'We believe this to be a sign of quality developments slowly reaching full occupancy, especially for dwellings which are low in numbers,' it said in its latest report on the emirate's residential real estate market.
Although rental rates for several areas saw marginal increases, these were often offset by incentives such as rent free periods, no agency fee, free utilities, Asteco added.
The report said apartment sales prices remained relatively stable with some increases in Palm Jumeirah and the Greens, both popular areas among executives and families.
However, it noted that Discovery Gardens experienced further declines due to the large amount of supply, low rental rates and high service charges.
Asteco said sales prices for villas also fared positively in the first quarter of 2012, rising by 4% on average compared to the previous quarter.
It said that this increase has been predominantly driven by increased acquisitions from owner occupiers in areas such as Arabian Ranches, Emirates Living and Jumeirah Village.
But the Emirate's commercial market still has some way to go towards recovery. Pending and upcoming supply has resulted in office rental rates across various locations in Dubai contracting by 1% despite healthy enquiry and transaction levels, the Asteco report also shows.
'Bur Dubai has seen some marginal declines of 6% due to continuous consolidations. It should be noted, however, that popular business districts with limited commercial space fare well and generally achieve high occupancy rates,' says the report.
However, rental rates in Downtown Jebel Ali's The Galleries by Limitless have increased as a result of occupancy reaching 75% across the three Grade A commercial towers, with more leases being finalised. In addition, the developer is offering both free zone and non-free zone licenses.
Office sales prices experienced marginal declines of 2% on average as a result of low transaction activity in areas such as Business Bay and DIFC which contracted by 7 and 6% respectively.
'In contrast to the residential sector, which seems to be stabilising/recovering, the commercial market still has a long way to go as oversupply will continue to adversely affect rates,' the report adds.
SOURCE Propertywire
