While property markets are struggling elsewhere, the Dubai market is continuing to thrive on the back of a dynamic economy
August 3, 2012 (Newswire) - New figures show that both sales and rents in the property market in Dubai are performing well.
Data from the Knight Frank Prime Global Cities Index revealed that house prices in Dubai increased by 1.8 per cent in Quarter 2 compared with Quarter 1. From January to June the index rose by 5.6 per cent, whilst the 12-month price growth stood at 2.3 per cent. The Knight Frank report added that prices grew by 3.5 per cent on a year-on-year basis for June.
Sales rise 15%
A second recent report provided more evidence of growth in Dubai's property sector. The analysis from property broker CBRE said that sales of residential property in Dubai rose by 15 per cent in the second quarter.
Total transactions hit DH4billion between April and June compared to the DH3.1billion of deals between January and March. The report was based on official data supplied by the Dubai Land Department (DLD), which calculated that the total transactions registered in Q1 of 2012 stood at 2745, whereas the total conducted in Q2 were 3,165, an increase of 420 and portraying the 15 per cent quarter-on-quarter rise.
CBRE's Head of Research, Matthew Green said: "Recent sales activity has been highly concentrated within established community locations rather than new and emerging markets."
The residential market in Dubai is performing better than the commercial office sector. Rents for apartments and villas have seen positive growth in the first half of the year.
Property in notable locations has also experienced growth. Both owners and investors have said the increase in property prices and rents have proved attractive. Apartment leases are growing on a quarterly rate by two per cent.
CBRE predicted the residential market will remain strong for the rest of the year despite the traditional slow down for the summer period and, especially, throughout Ramadan.
Whilst the rest of the world is struggling to recover from the economic downturn and European countries are struggling with the Eurozone crisis, Dubai's property market is steadily making progress, which is likely to continue in the future.
Good bet for investors
Investors are still wary about foreign investment, but the market in Dubai is recovering at a much faster and stronger rate than many other worldwide markets and continued economic growth in the emirate is likely, which makes it a good bet for investors.
This should spark interest in the many new hotel developments, such as The First Group's two luxury hotel apartment projects in Tecom, Metro Central and Grand Central, which are situated in the bustling business district of Tecom in the heart of "New Dubai". The luxury end of the market did particularly well in 2011, soaring 17.6 per cent.