Dubai property prices rose by up to 42 percent during the past year, with rentals up by as much as 23 percent, according to Asteco’s latest property report. Unlike Knight Frank, which is a London-based firm and has no real experience in Dubai’s real estate market other than marketing, Asteco is based in Dubai and in the market since many years. How the firm collects the data it analyses it wasn’t revealed.
In recent years, Dubai’s property rices rise is largely influenced by optimistic media coverage and property consultancies reports.
The area with the most impressive performance for the last 1 twelve months were Jumeirah Lakes Towers and Discovery Gardens. Jumeirah Lakes Towers grew with 46%, reaching nearly $275 or AED950 per square foot. Discovery Gardens hits prices of around $190 (AED700). This is equal to a 75-percent rise.
The Greens and Jumeirah Beach Residences also witnessed an increase. For about five years, their prices increased with more than 30%. However, the priciest area is Downtown. There, the average sales price amounts to over $460 or AED1,700 per square foot.
Jumeirah Village was the leader in the villas category. The area registered a rise of 50%. As a result, villas in this part of Dubai cost about $204 (AED750) per square foot. Following behind is Jumeirah Island where prices jumped with 30%, reaching nearly $355 (AED1,300) per square foot. Springs also saw a rise. Sales prices in the area went up 25%. Now they amount to an average of $272.26 (AED1,000) per square foot.
The most expensive villa area is Palm Jumeirah. Prices there reach to almost $545 or AED2,000 per square foot. That is $190 or AED700 more than villas located in Jumeirah Islands. In addition, it is nearly two times more than all other of Dubai’s freehold areas.
Signs of recovery are also seen in the rental property market. The average year-on-year growth there is 19% for apartments. For villas, it is 23%. The biggest jump for the last twelve months was registered in International City. Rental prices in the area increased with 35% for one year. As a result, a one-bedroom apartment there will cost you AED32,500 or $8848.35 per year.
In Q3 2013, Downtown Dubai was about 25% below its peak levels from 2008. The rent for a two-bedroom apartment in the area is estimated at AED140,000 ($38,116) per year, according Asteco. However, according to our observations such units can be found also for AED125,000. Nevertheless, Palm Jumeirah is still the priciest area for renters. To rent a two-bedroom apartment there, you will need to prepare AED160,000 or $43,560 a year.
Among villas areas, most impressive is the rise in The Springs. It saw a jump of 34%, hitting AED165,000 or $44,922 per year for a three-bedroom house. Rental prices of three-bedroom villas in Mirdiff increased with 31%. They now amount to AED120,000 or $32,671 per year. Rents for villas of the same size in The Palm Jumeirah are estimated at AED350,000 or $95,290 per year. That is barely 10% lower than the peak witnessed five years ago.