No more 'distressed sale', quality properties see increasing stability, says real estate advisory

A transaction-based reference for prospective buyers and leasers alike, the Dubai Price Maps continues to evidence the 180 degree turnaround from the previously supply- driven property market to the more demand-driven market.

For potential home buyers, the latest price maps from Landmark Advisory indicate that 'distressed sale' opportunities are largely finished, as sellers refuse to lower existing prices, and buyers in some cases are paying increased rates for sought-after residential developments with limited homes available.

On average, Landmark Advisory anticipates further decreases in Dubai rents for the third quarter of 2009, although signs of rent stabilization exist and some landlords are still experiencing robust demand for higher-quality rented homes in premium locations.

Ms. Jesse Downs, Director of Research, Landmark Advisory, stated:

"For the Dubai market, there are distinct signs of market stabilization and a return of confidence from end-users. Sales prices have even increased in some cases. This increase is largely due to the dynamics of each development. Smaller villa developments with a limited supply that have tapped into sufficient value recognition among end-users with regards to location, layout, build quality and amenities/facilities are among those residential developments experiencing price increases. Examples in the sales market include Jumeirah Islands and Green Community. We are also seeing similar trends in leasing rates for select villa communities."

As evident from the latest sales and rental price lists, the sharpest decline is with apartments. The combination of the economic downturn and a large quantity of high rise apartments that were completed in 2008 has resulted in an oversupply in this segment.

One notable element of the latest Landmark Advisory price maps for Dubai is the continual refinement of price differentiation, which was previously based on factors such as location, views and the quality of finishing. Now environmental factors are influencing consumer decision-making; for example, in some developments units in close proximity to high voltage power lines are renting for lower rates than similar units located farther from power sources.