Residential Sales Stabilize in Dubai, Rental Rates Drop

---

(DUBAI, UAE) -- The price of apartments and villas remained stable in Dubai in Q2 compared to Q1, according to a new report by Dubai-based real estate management company Asteco.

The Asteco Q2 2010 Report said that no change was recorded in the sales price of apartments, with those in Dubai International Financial Centre and on Palm Jumeirah still commanding the highest prices.

"The market is, however, at a stage where pricing can vary from unit to unit in any particular property. We have noticed some overseas clients, who bought property on Palm Jumeirah, are prepared to sell at a much lower price per square foot as the exchange rate is more favourable without them incurring any discount," said Elaine Jones, CEO, Asteco Property Management.

Villas also generally remained on a par with the first quarter of 2010. Palm Jumeirah villas are still the most expensive at $490 per square foot due to the iconic water-front development, with the Green Community at the opposite end of the scale with villas selling for $191 per square foot.

On the rental side, however, an increase in the number of units coming online in Dubai during Q2 forced prices down, providing tenants with the opportunity to move to better locations or larger properties. Apartment rents declined an average of 8 percent compared to Q1.

"Although relocation trends from Abu Dhabi and Northern Emirates have slowed due to price correction in those markets, internal movement in Dubai is at its peak with tenants looking for upgrades in terms of quality, size or location," Jones said. 

The report added: "Palm Jumeirah has also seen a significant amount of new supply with the handover of Marina Residences in the first quarter and the delivery of Oceana Residences in the second quarter of this year." Villas, on the other hand, fared better with rental reductions of just 4 percent on average across Dubai despite an increase in supply

---