According to estimates by a leading property consultancy firm, the sale prices of offices, flats and apartments in Dubai will continue their fall through the first quarter of 2010, mainly because of the excess of supply over demand. It is further estimated that apartment prices are set to take the biggest hit with a decline as much as 20 percent predicted during the next 18 months.
The firm noted that following the increase seen during the third quarter of 2009, the once promising villa prices also remained largely stagnated in Dubai with a marginal increase of 0.2 percent during the last quarter of 2009.
As for the prices of apartments, these dropped 4.3 percent in the last quarter of 2009, following the 3 percent decline in the third quarter. Moreover sale and leasing transactions in the commercial sector also remained low during fourth quarter 2009, with an average decline of 5.1 percent in sale prices, while the average office rents declined 8.4 percent.
The report predicted that average rents in Dubai are likely to fall, as there is an excess of residential units at a time when demand is fundamentally weak.
Another new trend being witnessed is that Dubai developers are considering renting out their new units on furnished basis. This helps generate immediate revenue for them, rather than having buildings without tenants. Moreover the furnished apartments have a higher rental value due to availability of conveniences such as bedroom, furniture and kitchen appliances and the higher investment made in them.
Real estate agents state that the rentals for furnished apartments are 10 to 20 percent higher on average as compared to unfurnished apartments. Given the current situation in Dubai Real Estate market, several investors have started to look at acquiring furnished apartments for short-term rentals. Many estimate that several individual units will be converted into furnished apartments this year.
Presently, rents for furnished apartments are falling in the range between Dhs. 5,500 and Dhs. 8,500 per month. There is also wide consensus that furnished residential property will generate a 15 to 20 percent premium over a typical unfurnished property. As an example, a furnished single bedroom shoreline apartment at the Palm Jumeirah should normally fetch Dh. 150,000 per year by way of rent, while a similar unfurnished apartment should generate about Dh. 120,000 per year.
Meanwhile another advisory firm has remarked in its report for the fourth quarter of 2009 that the selling rates of Dubai’s housing units are slowly approaching their intrinsic value, which shows that the real estate market is beginning to settle down. As a result of this, we might see slight corrections every quarter, but no major changes from current levels.
Better Homes has grown from a one-woman enterprise in 1986 into a company comprising over 400 employees, providing a wide range of property services including short stays, residential and commercial sales and leasing, property management, project sales and marketing across the UAE. Whether you want commercial Dubai accommodation such as a Dubai warehouse, a Dubai office or villas in Dubai for living or for investment, we can accommodate your needs. Please contact Better Homes for a quote today.
The firm noted that following the increase seen during the third quarter of 2009, the once promising villa prices also remained largely stagnated in Dubai with a marginal increase of 0.2 percent during the last quarter of 2009.
As for the prices of apartments, these dropped 4.3 percent in the last quarter of 2009, following the 3 percent decline in the third quarter. Moreover sale and leasing transactions in the commercial sector also remained low during fourth quarter 2009, with an average decline of 5.1 percent in sale prices, while the average office rents declined 8.4 percent.
The report predicted that average rents in Dubai are likely to fall, as there is an excess of residential units at a time when demand is fundamentally weak.
Another new trend being witnessed is that Dubai developers are considering renting out their new units on furnished basis. This helps generate immediate revenue for them, rather than having buildings without tenants. Moreover the furnished apartments have a higher rental value due to availability of conveniences such as bedroom, furniture and kitchen appliances and the higher investment made in them.
Real estate agents state that the rentals for furnished apartments are 10 to 20 percent higher on average as compared to unfurnished apartments. Given the current situation in Dubai Real Estate market, several investors have started to look at acquiring furnished apartments for short-term rentals. Many estimate that several individual units will be converted into furnished apartments this year.
Presently, rents for furnished apartments are falling in the range between Dhs. 5,500 and Dhs. 8,500 per month. There is also wide consensus that furnished residential property will generate a 15 to 20 percent premium over a typical unfurnished property. As an example, a furnished single bedroom shoreline apartment at the Palm Jumeirah should normally fetch Dh. 150,000 per year by way of rent, while a similar unfurnished apartment should generate about Dh. 120,000 per year.
Meanwhile another advisory firm has remarked in its report for the fourth quarter of 2009 that the selling rates of Dubai’s housing units are slowly approaching their intrinsic value, which shows that the real estate market is beginning to settle down. As a result of this, we might see slight corrections every quarter, but no major changes from current levels.
Better Homes has grown from a one-woman enterprise in 1986 into a company comprising over 400 employees, providing a wide range of property services including short stays, residential and commercial sales and leasing, property management, project sales and marketing across the UAE. Whether you want commercial Dubai accommodation such as a Dubai warehouse, a Dubai office or villas in Dubai for living or for investment, we can accommodate your needs. Please contact Better Homes for a quote today.
