Average lease rates for apartments and villas in Dubai showed positive growth during the first half of 2012, but established communities continued to outperform newer districts, according to CB Richard Ellis (CBRE).
Apartment lease rates on average grew by two per cent quarter-on-quarter though it remained in negative territory on a year-on-year basis. Villas rents rose two per cent quarter-on-quarter and five per cent in the first half.
Popular areas such as The Greens, Downtown Dubai and Tecom C witnessed average increase of five to eight per cent in the second quarter compared to the first quarter.
“Occupancy rates are also on the rise as limited new supply and the availability of facilities and menities have made these locations highly sought after for tenants,” the global real estate consultancy said.
Among the newer districts, Jumeirah Village witnessed a five per cent drop during the quarter, while Dubai Sports City, Motor City, International Media Production Zone and Business Bay remain largely unchanged.
Limited availability of villas in established communities continued to drive villa lease rates higher by two per cent quarter-on-quarter.
Demand was highest for two to four bedrooms villas. CBRE also ruled out possibility of a rent or occupancy decline in established areas despite major villa projects likely to enter the market in the coming months.
Earlier this month, Jones Lang LaSalle (JLL) said rents for villas and apartments in established communities and prime buildings across Dubai rose 10 per cent and nine per cent, respectively, in the second quarter compared to the same period last year.
In the second quarter, nearly 3,000 new residential units were added to the market, taking the total inventory to around 344,000 units, JLL said.
Asteco, a real estate consultancy, said recently that average apartment rents gained six per cent while villas rose nine per cent in the second quarter.
Dubai, it said, currently has 402,800 apartments and 58,300 villas and nearly 11,600 apartments and 6,100 villas are expected to enter market in the second half of 2012.
Citing data sourced from Dubai Land Department, CBRE said total residential transactions grew 15 per cent to 3,165 in the second quarter compared to 2,745 in the first quarter 2012.
The total value of transactions for second quarter stood at Dh4 billion compared to Dh3.1 billion in the first quarter. Average transaction values for the first half reached Dh1.2 million.
Dubai Land Department, however, said on July 23 that overall sales for the first quarter were at Dh22.34 billion with cash sales accounting for 68 per cent, or Dh15.23 billion, of the total sales.