15 April 2012
Dubai villa prices bounce back to early-2008 levels
Villa prices in Dubai appear to have bottomed out and are now at levels similar to early 2008, according to a new report by Jones Lang Lasalle.
Villa prices in the emirate began to recover towards the end of 2011 and are now 3% higher than they were in January 2008, but they remain 25% lower than at their peak in Q3 2008.
“Apartment sale indices have also begun to stabilise but remain at lower levels, 34% down on the peak in the third quarter 2008,” the report said. Jones Lang Lasalle based its analysis on property price data from REIDIN.com.
The rent indices from REIDIN.com show that rents for villas are 5% higher than 2009 levels, but apartment rents are still up to 30% lower.
“The villa market is expected to continue to outperform the apartment sector and whilst prime residential assets in well-established locations continue to see improved performance, secondary buildings and locations are still suffering from rental and pricing declines,” the report noted.
About 3,000 additional units were added to the Dubai market in Q1, bringing the total current residential stock to around 341,000 units. Almost 90% of the completions in 2011 were apartments.
By the end of this year, a total of 28,000 new units are expected to be completed, which would represent an 8% increase on current stock.
“While liquidity is returning to the residential market and some previously stalled projects are recommencing, we expect that a substantial proportion of the supply due to enter the market in 2012, much of which was initially due to complete in 2011, will experience further delays,” the report said.
Freehold locations that will see the largest additional supply this year are Dubailand (4,830 units), Jumeirah Park, (4,242 units), Jumeirah Village (3,891 units), and Dubai Marina (3,081 units).