Asteco: Dubai Focus Q3 2011
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The road to home finance has been a long one for the Kingdom, but with its highly anticipated mortgage law edging ever closer to ratification, would-be homeowners and financial institutions are gearing up for a new era of opportunity.
With the announcement this year of a US$66.7 billion initiative to address the demand-supply imbalance in the Kingdom’s housing market, social infrastructure spend is topping the Government agenda as it focuses on building affordable homes for the future.
The South-East Asian island has seen a number of distinctive developments come to fruition over the past few years as the country further establishes itself.
Highlights and analysis from Dubai's residential and commercial property markets during the third quarter of 2011.
Residential
- Apartment sales prices and rental rates declined by 4 and 1% respectively over the last quarter.
- Whilst sales prices in Palm Jumeirah, JBR and DIFC remained stable, Discovery Gardens experienced a drop of 10% as a result of individual landlords being unable to retain/attract tenants to lower mortgage payments. This can be attributed to the fact that Nakheel released a significant number of units at reduced rents, which, coupled with the high service charges, has forced some owners to sell at reduced prices.
- Rentals remained relatively stable over the summer months, with only Discovery Gardens, International City and Jumeirah Lakes Towers experiencing slight declines of 2% due to the high volume of supply within these developments.
- Sales prices and rental rates for villas remained stable due to overall lower transaction turnover and relocations, as well as the fact that most families were away during the summer school holidays and Ramadan.
Commercial
- The office market has seen slight declines of 3% for both sales and leasing.
- Sales prices and leasing rates in the majority of areas remained constant, but declines in Business Bay and Tecom C, cost by low demand and excess supply, resulted in a drop in overall rates.
- Transaction activity remains subdued with the occasional sale /lease of small- to medium-sized office units.
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