Amid economic crisis in EU, Dubai residential market at a high

DUBAI: Residential market continued its upward course in the UAE commercial hub of Dubai, with quality residential developments registering their highest average annual increase since 2008.

According to a latest report, the last quarter of 2012 saw robust growth in the residential market and the buyer profile was dominated by self-use and investments for rental income, with expatriates taking a longer-term view of living in Dubai.

Interestingly cash buyers outnumbered mortgaged sales. According to Asteco Property Management report, villa sales prices were up on average 23 per cent year-on-year and apartments made average gains of 14 per cent during the same period.

Quality residential developments in Dubai thereby ended 2012 with a strong last quarter performance to put the average annual increases at their highest since 2008, said the report.

The leasing market was no less impressive, with an average increase across all residential types of 17 per cent.

"The latter half of 2012 witnessed better than anticipated performance in terms of pricing, transaction activity and occupancy as well as new real estate launches," John Stevens, Managing Director, Asteco Property Management, said.

Sales prices for apartments and villas rose by 9 per cent in Q4 2012 alone, fuelled by increased confidence and improved financing.

"The recent clarification by the UAE Central Bank that it will not impose any immediate loan-to-value (LTV) caps on UAE banks, suggests that existing LTV ratios are likely to remain unchanged, in which case Asteco forecasts that the sales market will enjoy continued growth in 2013," Stevens said.

Increased enquiries pushed demand and prices up by 7 per cent for apartments and 5 per cent for villas in Q4 2012.

In terms of supply and demand, Dubai is still benefiting from the Euro crisis and the Arab Spring as people seek stability and better economic conditions.

Indicative of the strength of the market, the take-up time of advertised units has declined steadily over the year. In contrast to the residential market, the commercial market saw little movement during 2012.