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According to the latest figures from real estate company Better Homes, prices in all of Dubai's residential areas have continued their upward trend.
The sale price for apartments in the Business Bay district now averages just over Dhs3m, while flats in nearby Trade Centre, which has much fewer units on offer, average close to Dhs6.8m.
'The summer is always slower and it is inevitable that with Ramadan taking place during the summer the market has seen a slow down in both the residential and commercial sectors,' says Billy Rautenbach, Head of Operations at Better Homes.
Despite this, prices have steadily increased over the course of 2008.
Dubai property prices increase
Completed villas in the Arabian ranches and Palm Jumeirah are fetching averages of Dhs5m and Dhs19.8m respectively, reflecting a slight change in investor demand, with properties that are ready for occupation becoming more sought after.
'There has been a slight slowing down of demand in off plan, direct from developer sales, and there is more demand for completed or near completed properties,' confirms Rautenbach. 'We are also seeing more financed deals from buyers, but sellers are reluctant to accept finance due to delays and prefer cash.'
Despite this, investors in off plan properties are still likely to see healthy returns from any outlay, with prices continuing to rise. Apartments in Dubai Waterfront and Jumeirah Lake Towers now go for between Dhs1.1m and Dhs5.2m, and Dhs720,000 and Dhs12m respectively.
Villas in Dubai Waterfront and the Palm Jebel Ali have asking prices of between Dhs7.9m and Dhs11.8m, and Dhs8.2m and Dhs17.8m respectively.
Investor sentiment does not yet appear to have been affected by the emirate's ongoing corruption probes, which have encompassed individuals from many of the city's real estate developers.
'Currently, there is no evidence that these have affected investor sentiment. But, if there is an effect, it may take a few months to show in numbers,' says Rautenbach.
Nor do reports of a possible correction in the market appear to have detracted from the overriding view of property as a 'safe' investment: 'There may be a correction in some locations or property types but property remains a good investment, and should form part of any investment portfolio.'
Healthy rental returns
Rental returns in Dubai have also continued to rise.
Landlords can ask for up to Dhs650,000 and Dhs300,000 annually respectively for apartments in the Dubai Marina and the Palm Jumeirah. The average rentals in the same areas stand at Dhs152,000 and Dhs258,000.
Villas in Umm Suqeim, Al Barsha and the Arabian Ranches average annual rental returns of Dhs480,000, Dhs450,000 and Dhs650,000 respectively.
The continued influx of residents into the city is providing the impetus for the upward growth rental returns for landlords. Rental prices in Dubai Silicon Oasis, which had been lagging behind some other areas, can now fetch up to Dhs135,000 annually.
'In this market there has always been a big demand for rental property. The increase in demand is not due to increases in property prices, it's merely an increase in the available property to rent,' says Rautenbach.
As yet demand far outstrips supply and a recent push by Dubai Municipality to evict non-related cohabitants from shared villas has allowed landlords to put these back on the market under fresh tenancies that are unaffected by previous rent caps, as well as providing increased demand for completed properties.
Staff Reporter
