Luxury villa prices in Dubai soared by an average of 23 percent year-on-year in the fourth quarter of 2012, while top-end apartment prices rose 14 percent in the same period, the highest increases since the boom era of 2008, a new report claimed.
“The latter half of 2012 witnessed a better-than-anticipated performance in terms of pricing, transaction activity and occupancy as well as new real estate launches,” said John Stevens, managing director, Asteco Property Management.
The area which saw the biggest villa price increases was The Springs, where prices increased 38 percent to an average of AED9,700 (US$2,640) per sqm. In second place was Jumeirah Islands, where prices were up 28 percent to an average of AED12,400 per sqm, while Arabian Ranches saw values jump 27 percent to an average of AED10,250 per sqm.
Palm Jumeirah was the main winner in terms of apartment price increases, with average price tags up 27 percent to an average of AED15,100 per sqm. Second was The Greens, up 23 percent to an average of AED10,250 per sqm, followed by Downtown Dubai, which saw an 18 percent average boost to AED14,000 per sqm.
Soaring prices have “put the average annual increases at their highest since 2008,” the Asteco report observed.
The rental market also saw a boost, with average apartment leases rising the most in Discovery Gardens, where annual costs rose 23 percent to an average of AED45,000 for a one-bedroom unit.
Downtown Dubai also rose 23 percent but a one-bedroom apartment cost an average of AED80,000 per annum. International City lagged behind but still saw prices rise six percent to an average of AED24,000 for a one-bedroom flat. The average rental rate increase across the study period was 17 percent.
“If demand continues, we expect to see a shift in the market from being predominantly tenant-led to one controlled by landlords, especially in quality, well managed and established developments,” added Stevens.
According to data from real estate intelligence provider Reidin.com, the sale of a 14,349 sqft apartment in Dubai Marina’s Le Reve Tower for AED34.7m (US$9.4m) was the most expensive real estate transaction in the emirate last year.
The apartment was one of four properties in the luxury apartment block to rank among the emirate’s most expensive real estate sales in 2012, the website said.