Dubai, much like the rest of the world’s favored destinations faced difficult times over recent years but predictions regarding both International City and the prime area of Dubai Marina suggest that 2010 will be a year of equilibrium.
Flats For Rent In Dubai
If we look at the average prices of flats for rent in Dubai per square foot from Nov 08 to Feb 10 in comparison to other global locations, the Dubai Marina has enjoyed relative stability despite a decline of 11%. As expected, International City saw less consistency than its prime neighbour with exacerbated movements in average rental prices; but the trend still followed a similar pattern. However both areas saw an upswing at the beginning of 2010 which suggests that the market is in a new property cycle. The average rents across Dubai’s real estate market for a two bedroom flat vary from AED 50,000 to in excess of AED 200,000. In Burj Khalifa, located in Downtown Dubai, advertised rents for new residential units range between AED 350,000 to 450,000. It will be a revealing insight into the property market to see where these transactions actually sit.
Another similarity between these two areas of Dubai is the pattern of price spreads. Dubai Marina maintains a higher price spread over the period June 2008 to Feb 2010 ranging from AED 2,500 per sq. ft at the peak and which has now stabilized at AED 1000, which is acceptable as the market place moves into its next phase. The peak of International City’s price spreads was in December 2008 and now has an average price spread of AED 800 per sq. ft. Despite these peaks and troughs both areas have experienced the same trend indicating an overall narrower spread during this period of time.
Uplift Dubai Marina Volumes
Despite transactional volumes remaining at a reasonable level including a sharp uplift in Dubai Marina volumes in February, the purchasers still control the negotiations. Without the support and increased lending ability of the banks and financial institutions the true impact of the acceleration could be lost. Globally we have seen that when banks place greater emphasis on the property value rather than the applicant’s affordability it contributes to a sub-prime crisis as seen in the USA. Furthermore, it permits speculators into the market place due to the minimal cost of entry.
There has been a call for action for the banks and financial institutions in Dubai to increase their lending and this is anticipated to occur during the later months of 2010 further enhancing the Emirate’s road to recovery.
