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Property Sector Shows Signs of Recovery!

21 April 2009

DUBAI - The early signs of confidence are returning to Dubai and Abu Dhabi as property listings are drying up and owners prefer to hold their properties for the medium-to long-term, instead of discounting prices further to attract immediate buyers, according to a report by Landmark Properties.

Owners are choosing to lease their properties as a cash-generating alternative to selling. The leasing market in Dubai is still strong, showing continued interest from internal relocations and excess demand from Abu Dhabi,” Jesse Downs Director of Research and Advisory Services, Landmark Advisory, told Khaleej Times.

The average prices in Dubai during 2009 first-quarter decreased 23 per cent for apartments and 32 per cent for villas, compared to 2008 fourth-quarter. Prices for 4-bedroom villas suffered the heaviest decline, at 16 per cent, the Landmark Advisory revealed in its 2009 Q2 Real Estate Report..

Average leasing rates for apartments decreased 4 per cent in 2009 first-quarter, with 1-bedroom apartments declining the most, at 11 per cent. Average villa rents declined by 17 per cent, but the number of villa rentals increased by 26 per cent. Overall, residents are favouring moving to higher quality developments in Dubai. She noted that the future of sale prices and transaction volumes would depend largely on the evolution of lending policies and demographic changes over the next four months. In terms of population, additional outflows are likely to coincide with the end of the school year.

Commenting on the Abu Dhabi real estate sector, she said: “Sale price declines accelerated during 2009 first-quarter, after falling by 5-15 per cent in 2008 fourth quarter. Secondary market listing prices fell 15-20 per cent for apartments and 25-30 per cent for villas. However, by the beginning of 2009 second quarter, sale prices started to stabilise as sellers slowed the pace of price-cutting.”

The report said that Abu Dhabi’s rental market has also stabilised. After skyrocketing in 2008, some rents have begun to show signs of a marginal correction. On an average, asked rents for apartments remained stable during 2009 first-quarter, indicating the resilience of the apartment segment. Villa rents, however, decreased 10-15 per cent, with listed rents on 4-bedroom units falling the most, at 20 per cent.


aneela@khaleejtimes.com

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