Dubai house prices and rents weakened in the third quarter, according to a report from Asteco.
After ten quarters of increases, average apartment rents fell 2 per cent during the three months to the end of September, while average villa rents dipped 3 per cent as the number of new homes in the city increased, the broker said.
Apartment prices fell 1 per cent and villa prices lost 4 per cent at the end of September compared with the start of July as buyers struggled to meet strict loan to value caps imposed on mortgage loans by the UAE Central Bank.
“For the first time since 2012 we have seen both residential rental rates and sales prices decline as a result of a natural adjustment to continuing new supply entering the market,” said John Stevens, the Asteco managing director. “We believe that sales prices may soften further with more new supply on the way.”
Villa rents in The Springs experienced the biggest quarter-on-quarter falls, Asteco reported, dipping 8 per cent in the three months to the end of September to between Dh180,000 and Dh205,000 for a three-bedroom villa.
They were followed by apartments in the more affordable areas of International City and Discovery Gardens, which sank 7 per cent over the period to between Dh44,000 and Dh48,000 for a one-bedroom apartment in International City and between Dh60,000 and Dh72,000 at Discovery Gardens.
Rents for villas in Arabian Ranches and Mirdif fell 5 per cent over the quarter to stand at between Dh115,000 and Dh155,000 for a three-bedroom villa in Mirdif and between Dh170,000 and Dh260,000 in Arabian Ranches.
Rents for villas in Jumeirah Village sank 4 per cent to stand at between Dh145,000 and Dh180,000 at the end of September, and they were down 3 per cent in the Green Community, Jumeirah and on Palm Jumeirah.
Rents for apartments in Dubai Marina and Jumeirah Village also fell slightly, declining 2 per cent over the quarter to stand at between Dh90,000 and Dh120,000 for a one-bedroom apartment at Dubai Marina and between Dh60,000 and Dh80,000 in Jumeirah Village. Asteco blamed the rent falls in the Marina on continuing construction work and traffic congestion.
Apartment rents on Palm Jumeirah and villa rents at the Meadows and Victory Heights were the only properties to show an increase over the quarter, according to Asteco.
In terms of sales rates, apartment prices at Dubai Marina and villa prices at Victory Heights and Jumeirah Islands were subjected to the steepest falls according to the Asteco data, all dipping by 8 per cent.
Dubai’s luxury villa market recorded some of the biggest falls, with prices for villas at Arabian Ranches down 6 per cent to between Dh850 and Dh1,450 per square foot.
And villas at The Springs, the Meadows and the Green Community were all down 5 per cent over the period, as were apartment prices on Palm Jumeirah.
According to rival broker Care, 19,000 more new homes were expected to be handed over in Dubai next year, hampering landlords’ efforts to further raise rents and prices.
And at the Cityscape property exhibition last month developers unveiled plans for a further 27 new projects in the city.
lbarnard@thenational.ae
