The average rentals in Dubai, Sharjah, and Ajman witnessed a decline of about 10 per cent last year, according to real estate experts.
Last year, there was gradual stability compared with the sharp rental decline witnessed in 2009 and 2010. During that period, property prices dropped between 40 and 50 per cent compared to peak prices in 2008.
Sharjah accounted for the largest share of the decline, with residential rentals declining between 10 and 20 per cent, while the decline in Dubai and Ajman ranged between 5 and 10 per cent.
With the demand for residential units seen increasing this year, the scenario is likely to improve, reported Emarat Al Youm on Saturday.
Muhannad Al Wadia, General Manager of Harbor Properties at Dubai, said: "Last year is the year of the gradual stabilization of the real estate market".
"Last year we saw many positive initiatives, which have contributed to strengthen the pace of recovery of the sector, and renewed confidence in it".
He added, "The most important decision of the Federal Government was extending the visa for the property investors from six months to three years, which led to a revival in lending from banks, who once again started their mortgge campaigns to attract serious investors."
The office sector was the most affected, as it witnessed a continuous decline, ranging between 3 and 4 per cent on a quarterly basis during 2011, while the residential sector was the best performer, especially villas, because of the high demand and low supply in this sector.
MARKET IN RECOVERY MODE
Meanwhile, Muhannad Al Wadia predicted that demand will increase during 2012 in line with the increase in the pace of recovery of the global economy and a rise in investor and consumer confidence.
He said the positive performance of the real estate sector in Dubai is linked with the improving local and global business landscape. In addition, supply will be a key determinant of the performance of the sector and the pace of its recovery.
"Increased supply, especially the office sector, will be the primary concern for real estate professionals and those interested in the property sector".
An estimated 20 per cent of residential units in Dubai, and at least 30 per cent of its office space is unoccupied, and several of projects under construction expected to complete in 2012.
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